Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
BUILDINGMOMENTUMCAPTURING
OPPORTUNITIES
ANNUALREPORT
2019
NO
RD
IC G
RO
UP LIM
ITED • A
NN
UA
L REPO
RT 2019
Incorporated in the Republic of Singapore on 8 April 2010)(Company Registration Number: 201007399N)
Listed on the Singapore Stock Exchange Mainboard in 2010, we are a global solutions provider in areas of System Integration, Maintenance, Repair, Overhaul & Trading, Precision Engineering, Scaffolding, Insulation Services, Petrochemical & Environmental Engineering Services and Cleanroom, Air & Water Engineering Services. Our System Integration division turns systems into solutions by providing Flow, Automation and Navigation solutions, while the Maintenance, Repair, Overhaul & Trading division provides after-sales service support for the marine, oil & gas and infrastructure industries. Our Precision Engineering division designs and builds tooling systems, and provides turnkey production solutions for the aerospace, marine, medical, oil & gas, and electronic manufacturing industries. Our Scaffolding Services division provides scaffolding and alternative access solutions for the oil & gas, petrochemical, construction and marine industries. Our Insulation Services (“IS”) division specialises in thermal and cryogenic insulation, thermal spray aluminium and passive fireproofing services in the petrochemical, pharmaceutical, marine, oil and gas industries. Our Petrochemical and Engineering services division specialises in a wide range of services: pre and post commissioning cleaning, heat exchanger cleaning, tank cleaning, process plant recovery work, temporary intervention activities in process plants, on line cleaning process, turnaround work and support, decontamination services, temporary equipment support services, product filtering services and support in operation of utility plants in the petrochemical, manufacturing, and infrastructure industries. Our Cleanroom, Air and Water Solutions Engineering Services provides tools hook up services, air pollution control scrubbers and water treatment plants for the semiconductor, oil and gas, power plant and municipality sectors.
Our Precision Engineering operation is based in Suzhou, People’s Republic of China. Our head office and System Integration production
and warehouse are located in Singapore. Our Cleanroom, Air and Water Solutions Engineering Services is located in Singapore and
Malaysia.
CORPORATE PROFILE
CONTENTS
IFC CORPORATE PROFILE
02 -03 OUR BUSINESSES
04 SALES AND SERVICES NETWORK
05 AWARDS & ACCREDITATIONS
06-07 CHAIRMAN’S STATEMENT
08-09 BOARD OF DIRECTORS
10-13 SENIOR MANAGEMENT
14-15 FINANCIAL HIGHLIGHTS AND INVESTMENT SCORECARD
16-20 FINANCIAL AND OPERATION REVIEW
21-23 OUR COMMITMENT TO CORPORATE SOCIAL RESPONSIBILITY
24 CORPORATE INFORMATION
25-43 CORPORATE GOVERNANCE REPORT
44-46 STATEMENT BY DIRECTORS
47-50 INDEPENDENT AUDITOR’S REPORT
51-109 FINANCIAL STATEMENTS
110-111 SHAREHOLDINGS STATISTICS
112-118 NOTICE OF ANNUAL GENERAL MEETING
PROXY FORM
121-122 ADDITIONAL INFORMATION ON DIRECTORS SEEKINGRE-ELECTION AT THE ANNUAL GENERAL MEETING
01NORDIC GROUP LIMITED / ANNUAL REPORT 2019
With our extensive network of service centres spanning
across the globe, our dedicated team of consultants readily
provides prompt service support round the clock as part
of our after-sales service. To date, over 1,000 vessels have
been fitted with our systems, with the number steadily
increasing with every delivery of new vessel, creating more
opportunities for conversion and retrofitting of existing
vessels.
MAINTENANCE, REPAIR, OVERHAUL AND TRADING
SYSTEMS INTEGRATION
We turn systems into solutions by providing Flow,
Automation and Navigation solutions that includes valve
remote control systems and tank gauging systems. We
also offer services such as Engineering, Procurement,
Installation, and Commissioning (“EPIC”) for conversion,
upgrading, factory and infrastructure automation.
We provide scaffolding and alternative access solutions
for the oil & gas, petrochemical, construction, marine and
semiconductor industries in Singapore. We have the requisite
technical capabilities, expertise and infrastructure to execute
complex projects. As testament to our strong customer base
and long-standing relationships, our subsidiary, Multiheight
Scaffolding Pte Ltd is the resident contractor for many major
local and multinational companies.
We specialize in supplying thermal, cryogenic, acoustic,
clean room insulation, passive fireproofing services and
industrial coatings such as thermal spray aluminium. With
a skilled workforce and technical expertise, our subsidiary,
Austin Energy (Asia) Pte Ltd has established a strong
presence in several industries including the marine, oil &
gas, petrochemical and pharmaceutical industries.
SCAFFOLDING SERVICES INSULATION SERVICES
02 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
OUR BUSINESSES
Featuring 5-axis CNC machines at our production facilities
in Suzhou, PRC, we specialize in the design and building
of tooling systems, and provision of turnkey production
solutions in high mix, low volume niche industries, servicing
customers mainly from the marine, oil & gas, aerospace,
medical and electronic manufacturing services industries.
PRECISION ENGINEERINGCLEANROOM AIR & WATER ENGINEERING SOLUTIONS
We specialize in cleanroom, air and water engineering
solutions which includes tools hook up services, air
pollution control scrubbers and water treatment plants
for the semiconductor, oil and gas, power plant and
municipality sectors.
We specialize in a wide range of services: pre and post
commissioning cleaning, heat exchanger cleaning,
tank cleaning, process plant recovery work, temporary
intervention activities in process plants, on line cleaning
process, turnaround work and support, decontamination
services, temporary equipment support services, product
fi ltering services and support in operation of uti l ity
plants. We serve the petrochemical, manufacturing, and
infrastructure industries.
PETROCHEMICAL & ENVIRONMENT ENGINEERING SERVICES
03NORDIC GROUP LIMITED / ANNUAL REPORT 2019
OUR BUSINESSES
Covering Singapore and various locations globally, our system integration division sales and
services network provides prompt and proficient service support.
Existing Presence (Agents) Nordic
MALAYSIAMALAYSIA
((New subsidiaryNew subsidiary))
KOREAKOREA
CHINACHINA
TAIWANTAIWANINDIA
SINGAPORESINGAPORE
((NordicNordic HQ) HQ)
GERMANY
SWEDEN
FRANCE
TURKEYTURKEY
CYPRUSCYPRUS
SPAINSPAIN GREECEGREECE
04 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
SALES AND SERVICES NETWORK
SYSTEMS INTEGRATIONAll systems, associated equipment and parts offered to our customers are accredited by various marine classification bodies such as ABS, China Classif ication Society, Germanischer Lloyd, Indian Register of Shipping, Korean Registry of Shipping, Lloyd’s Register, Nippon Kaiji Kyokai and Polski Rejester Statkow. Attaining certifications, such as ISO9001:2015 Quality Management System, OHSAS 18001:2007 Occupational Health and Safety Management System and the WSH bizSAFE Star award, further reinforces our steadfast dedication to quality and safety excellence.
INSULATION SERVICESOur Insulation Services division is committed to providing quality products and solutions to customers. Besides having the quality certification ISO9001:2015, we are also ISO 45001 certified. We are awarded bizSAFE star certification from the Workplace Safety and Health Council.
SCAFFOLDING SERVICESOur Scaffolding Services division was one of the first in its industry to obtain the ISO 9001 (previously known as ISO 9002) certification in 1997. Multiheight has also received the ISO 45001:2018 occupational health and safety certification for the Erection & Dismantling of Metal Scaffolding. These are testament to our achievements in meeting stringent quality and safety requirements over the years.
PETROCHEMICAL & ENVIRONMENTAL ENGINEERING SERVICES Our Petrochemical & Environmental Engineering Services division is certified with the valued Integrated Management System (IMS), which encompasses 3 systems, namely the ISO 9001:2015 – Quality Management System, ISO 14001:2015 – Environmental Management System and OHSAS 18001:2007 – Occupational Health & Safety Management System. We are a certified OJT Centre with ITE, Singapore and also certified with the People Developer (PD) standard for our success in the training and development of our people, the Singapore Quality Class (SQC) Star for attaining greater heights of excellence on the business excellence journey and bizSAFE Star for our commendable work safety. We are also the official blood donation center for the Singapore Red Cross Society.
PRECISION ENGINEERINGOur commitment to quality is evident as we attained certification f o r A S 9 1 0 0 C a n d I S O certification (ISO9001:2015).
CLEANROOM AIR & WATER ENGINEERING SOLUTIONSOur cleanroom air and water engineering solutions are able to meet the stringent requirements of the industry by attaining and implementing the ISO:9001:2015 Quality Management System, ISO:14001:2015 Environmental Management System and the OHSAS:18001:2007 Occupational Health and Safety Management System. We are also a bizSAFE star certified organisation.
• Workplace Safety and Health Supervisor Award
• Workplace Safety and Health Performance Award
• Chevron Oronite Best Contractor Award (Gold)
• Singapore Maritime Distinguished Award 2014
• Singapore 1000 Award
• Workplace Safety and Health Performance Award (Silver)
• ExxonMobil Innovation and Productivity Safety Award
• ExxonMobil Zero Recordable Injury For >250k Man-Hours Award
• ExxonMobil Best Supervisor Award for Safety Contribution
• WSH Supervisor Award (1 Gold and 2 Silver)
• WSH Innovation Award (Silver)
• WSH Performance Award (Silver)
• Good Safety Performance by Pfizer Asia Pacific Pte Ltd
• Contractor Safety Performance Award (Special Award) by Chevron Oronite Pte Ltd
• ExxonMobil Zero Recordable Injury for >250k Man-Hours Award for 3 consecutive years
• GSK Good safety and Health Performance Award during the Jurong Plant Shutdown in January 2019
• Sembcorp Marine WSH Performance Award 2019 Gold Certificate
• Pfizer Asia Pacific Commendation for Good Safety Performance 2019
• JFE Engineering Corporation Certificate of Appreciation to certain employees for their contribution to the Design & Build of NTU-NEA WtE Research Facility to NEWRI
2012
20142016
2018
• ExxonMobil Zero Recordable Injury
• ExxonMobil Zero Recordable Injury for >250k Man-Hours Award for 3 consecutive years
• WSH Innovation Award (Bronze)
• WSH Supervisor Award
• Good Safety Performance by Pfizer Asia Pacific Pte Ltd
2017
2019
• Commendation for Good Safety Performance by Pfizer Asia Pacific Pte Ltd
• SME 1000 Award
• Workplace Safety and Health Performance Award (Silver)
• Chevron Oronite Best Contractor Award (Gold)
• ExxonMobil Zero Recordable Injury for >250k Man-Hours Award
• ExxonMobil Safety Performance Award for an Injury-Free 2015
2015
• Singapore 1000 Award
• Workplace Safety and Health Performance Award (Silver)
2013
• bizSAFE Enterprise Exemplary Award 2019
• ExxonMobil APRPC Safety Observation Champion for the Month – January 2019
• ExxonMobil Outstanding Supervisor Award 2019
• PUB Good Safety Award by Jurong Water Reclamation Plant (JWRP)
• Croda Business Partner of the Year Award
• Chevron Oronite Bronze Award for Achieving Good Safety Performance in the year 2019
05NORDIC GROUP LIMITED / ANNUAL REPORT 2019
AWARDS & ACCREDITATIONS
1 Based on the closing price of S$0.215 per share on 20 March 2020
2 Higher due to $10 million loan for the acquisition of factory at 2 Tuas Ave 10
3 Excluded lease liabilities- current and non-current of $4.0 million as these related mainly to the land rent of our properties which have to be capitalized due to the new accounting standard on leases as compared to being an operating lease commitment in FY2018
on
ry
.0urwan
DEAR SHAREHOLDERS,
On behalf of the Board of Directors of Nordic Group Limited
(“Nordic” or together with its subsidiaries, the “Group”), it is my
honour and privilege to deliver to you our Annual Report 2019
for the financial year ended 31 December 2019 (“FY2019”).
YEAR IN REVIEW
Group revenue declined 4% from our record revenue of S$87.9
million in FY2018, excluding the sales of carbon allowances, to
S$84.6 million in FY2019. This is also impacted by a reduction
of 17% in revenue contribution from Project Services to S$41.6
million in FY2019. However, revenue from Maintenance
Services grew 14% to S$43.0 million in FY2019.
Despite the major challenges in the current operating
environment, our Group had once again delivered a net profit
attributable to shareholders of S$8.5 million or earnings per
share of 2.2 Singapore cents per share in FY2019. To reward
our valued shareholders, our Group is proposing a final dividend
of 0.419 Singapore cents per share subject to shareholders’
approval at our Annual General Meeting on 27 April 2020.
Along with the interim dividend of 0.429 Singapore cents per
share which was distributed in August 2019, this represented a
dividend yield of 3.9%1 which is inline with our dividend pay-out
ratio of 40% since FY2015.
Our balance sheet remained robust as cash and cash
equivalents stood at S$43.2 million as of 31 December 2019.
Our total borrowings and debt stood at S$44.1 million as of
31 December 2019. Our net gearing ratio has also improved
from 19%2 in FY2018 to 2%3 in FY2019, we should be in a net
cash position by FY2020.
CONTRACT WINNING MOMENTUM
In FY2019, our Group has secured new contracts of
approximately S$18.6 million. In March 2020, our Group further
secured more contracts worth approximately S$30.4 million.
06 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CHAIRMAN’S STATEMENT
As a result of our contract winning momentum, our orderbook
remained strong at around S$92.0 million as of 31 December
2019. Our Project Services contributed S$49.1 million or 53%
while our Maintenance Services contributed S$42.9 million or
47% to our orderbook. These orders will derive sustainable
revenue streams for the Group up to FY2022.
Our Maintenance Services continued to grow in revenue
contribution as we focused on building more recurring income
to tide the Group over difficult times in our core industries –
offshore marine, oil and gas sectors.
ACQUISITION ON ENVIPURE
In November 2019, we completed the acquisition of Envipure
Pte. Ltd and subsidiaries (“Envipure Group”) for S$14.8 million.
Envipure Group provides cleanroom, air and water engineering
services such as tools hook up services, air pollution control
scrubbers and water treatment plants for the semiconductor,
oil and gas, power plant and municipality sectors. This earnings
accretive acquisition is in-line with the Group’s overall corporate
strategy to increase its suite of services to its existing clientele
base and to acquire new clientele by diversifying into other
industries.
Envipure is our fourth earnings accretive acquisition since our
listing in 2010. Once Envipure is fully integrated into our Group’s
operations, we would expect it to deliver synergistic benefits in
cross selling to our existing clients and provide more impetus
for our revenue going forward.
BUSINESS OUTLOOK
In February 2020, our Group’s operations in China had
extended closure due to precautionary measures against the
Covid-19 pandemic imposed by the Chinese government.
Since mid-March 2020, our factory in China is in full operation.
Our Group conducts daily temperature checks to monitor
our staff’s temperatures, hand sanitizers and masks are also
provided. We will continue to work with the relevant authorities
and follow their directives in containing the spread of the virus.
If this situation worsens, our business activities and productivity
will be affected when clients trigger their business continuity
planning process. Overall, our business performance for
FY2020 will be affected. However, our Group is cautiously
optimistic with the contracts secured to date, our prudent risk
management and potential opportunities for more acquisitions.
For majority of 2019, Brent crude prices had been trading
in a range of US$60 to US$70 per barrel. However, due to
the Covid-19 pandemic, Brent crude prices plunged from
US$68.91 per barrel on 6 January 2020 to a recent low of
US$30.05 per barrel on 16 March 2020.4
Oil majors with heavy investments in refineries must choose
between extending maintenance contracts or ramping up to
take advantage of cheap crude to fill up storage with refined
products. Lower crude prices may increase the demand
for maintenance and storage in the short to midterm. This
bodes well for our Scaffolding, Insulation and Petrochemical &
Environmental Engineering divisions.
Overall, our Group remains positive over our longer-term
prospects in the industries that we operate and serve in.
APPRECIATION
On behalf of the Board of Directors, I would like to take this
opportunity to express my gratitude to our customers for
their support over the years. We will continue to work hard to
maintain our high safety standards and to consistently deliver
quality products and services to you.
Thank you to our Board of Directors, especially Mr Hew Koon
Chan and Ms Ong Hua (who retired or will be retiring in this
coming AGM) for their contribution and advice since FY2010.
I would also like to thank our key management and staff for
their dedication, hard work, and commitment over the years.
Together, we have proven Nordic to be resilient and profitable
over the years while overcoming numerous challenges.
Most importantly, we would like to thank our loyal shareholders
for their unwavering faith in the strategic direction of the Group
and our management team. We would continue to strive for
excellence and to drive future positive financial performance to
enhance our shareholder value.
Thank you.
Yours sincerely,
CHANG YEH HONGGroup Executive Chairman
30 March 2020
4 Brent crude prices, Bloomberg data, 17 March 2020
07NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CHAIRMAN’S STATEMENT
CHANG YEH HONGEXECUTIVE CHAIRMAN
Chang Yeh Hong is our Executive Chairman. He was appointed to our Board on 8 April
2010 and was last re-elected at the Company’s Annual General Meeting (“AGM”) on
26 April 2018. He is responsible for the working of the Board; the reviewing of business
plans, strategic positioning and business expansion of the Group. He is a member of
our Nominating Committee. He has more than 18 years of experience in the banking
industry. From 1999 to 2000, he was the regional managing director of Asia Pacific
with Citibank, and from 2000 to 2002, he was the global head of a product group with
Standard Chartered Bank. Since he took an executive role with us in 2004, he has
played a pivotal role in the growth and development of our Group. Mr Chang holds a
Bachelor of Arts degree majoring in Economics from National University of Singapore
and has completed the Standard Chartered International Management Programme in
INSEAD Fountainbleau, France and the Business Financial Management Programme
with Manchester Business School, United Kingdom.
TEO LING LING DORCASEXECUTIVE DIRECTOR & CHIEF EXECUTIVE OFFICER OF NORDIC FLOW CONTROL
Teo Ling Ling Dorcas is our Executive Director. She was appointed to our Board on
30 June 2010 and was last re-elected at the Company’s AGM on 29 April 2019. She
has been with us since 2003 and was appointed Chief Executive Officer of Nordic
Flow Control in 2012. She is responsible for the overall operations, sales and business
development and profit and loss management of Nordic Flow Control. She has more
than 25 years of experience in the marine and offshore valve remote control industry.
From 1994 to 2003, she was with Tyco Flow Control Pte Ltd where she eventually took
on the position of sales manager. Ms Teo holds a Bachelor of Commerce degree with
major studies in Management from The University of Western Sydney, a Diploma in
Sales and Marketing from the Marketing Institute of Singapore as well as a Diploma in
Electrical Engineering from the Singapore Polytechnic. In 2006, Ms Teo was awarded
the Spirit of Enterprise Award in recognition of her inspiring her fellow Singaporeans to
achieve greater entrepreneurial excellence.
LEE KIM LIAN JULIANAINDEPENDENT DIRECTOR
Lee Kim Lian Juliana is our Independent Director. She was appointed to our Board on
16 September 2010 and was last re-elected at the Company’s AGM on 26 April 2018.
She is currently the Chairwoman of our Nominating Committee, and a member of our
Audit Committee and Remuneration Committee. Ms Lee also serves as an independent
director on the boards of other listed companies, namely Uni-Asia Group Limited and
Dyna-Mac Holdings Ltd. Ms Lee is a Director of Aptus Law Corporation, a law firm in
Singapore. She has more than 20 years of experience in legal practice and currently
heads the corporate practice of Aptus Law Corporation. Her main areas of practice are
corporate law, corporate finance, mergers and acquisitions and venture capital. Ms Lee
holds a Bachelor of Laws (Honours) degree from National University of Singapore and
is a member of the Singapore Institute of Directors.
08 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
BOARD OF DIRECTORS
ONG HUAINDEPENDENT DIRECTOR
Ong Hua is our Independent Director. She was appointed to our Board on 16 September
2010 and was last re-elected at the Company’s AGM on 26 April 2017. She is the
Chairwoman of our Audit Committee, and a member of our Remuneration Committee
and Nominating Committee. Ong Hua has over 20 years of working experience. She has
more than 10 years of external auditing with the international accounting firms (Deloitte
& Touche LLP and RSM Chio Lim LLP) prior to advancing her internal audit career
with Singapore Health Services Pte Ltd (SingHealth) in year 2007. Her employment
with SingHealth was transferred in year 2010 to MOH Holdings Pte Ltd till year 2017.
In March 2017, she joined KK Women’s and Children’s Hospital as Deputy Director,
Finance. In November 2018, she was transferred to National Dental Centre of Singapore
and is the Deputy Director, Finance. Ms Ong holds a Bachelor of Accountancy degree
from Nanyang Technological University and is a member of the Institute of Singapore
Chartered Accountants.
LEE KOK KENG ANDREWINDEPENDENT DIRECTOR
Lee Kok Keng Andrew is our Independent Director. He was appointed to our Board
on 29 April 2019. He is currently the Chairman of our Remuneration Committee, and a
member of our Audit Committee and Nominating Committee. Mr Lee also serves as an
Independent Director at OCBC Al-Amin Bank Berhad in Malaysia. He has more than 35
years of experiences in banking and financial services. Mr Lee holds a Bachelor of Social
Science (Honours in Economics) from the University of Singapore and has attended the
Stanford Executive Programme at Stanford University.
09NORDIC GROUP LIMITED / ANNUAL REPORT 2019
BOARD OF DIRECTORS
LIN CHOON HIN ERICEXECUTIVE DIRECTOR OF ENSURE
Lin Choon Hin Eric is the Executive Director of Ensure. He is also the founder of
Nordic Flow Control. Eric has more than 25 years of experience in the marine, offshore
and automation industries. Mr Lin holds a Diploma in Manufacturing Engineering from
Singapore Polytechnic.
TANG YEW QUANDIRECTOR OF MULTIHEIGHT & AUSTIN ENERGY
Tang Yew Quan is a director Multiheight and Austin Energy. He left our Group as the
Chief Financial Officer in April 2014 and rejoined 12 months later to assume the above
positions. He has more than 30 years of experience in the banking industry. He held
local and regional positions from 1977 to 2008 in Standard Chartered Bank. Prior to
joining our Group in December 2009, he was the Country Head of Credit for Small &
Medium Enterprises at the Taiwan branch of Standard Chartered Bank. Mr Tang holds
a Bachelor of Business Administration degree from the then University of Singapore
and a Master of Business Administration (Banking and Finance) degree from Nanyang
Technological University.
KOH WEI MING RODNEYCHIEF EXECUTIVE OFFICER OF AVITOOLS SUZHOU
Koh Wei Ming Rodney is the Chief Executive Officer of Avitools Suzhou. He is
responsible for the overall operations, sales and business development and profit and
loss management of Avitools Suzhou. Mr Koh was a senior repair development engineer
at Pratt & Whitney Services Pte Ltd (SPRO) from 1999 to 2001, and an engineering
manager from 2002 to 2005. From 2005 to 2006, he was the Operations Manager of
Avitools Singapore. Mr Koh holds a Bachelor of Engineering degree from the University
of Aberdeen and a Diploma in Mechanical Engineering from Ngee Ann Polytechnic.
10 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
SENIOR MANAGEMENT
HAN MENG SIEWCHIEF EXECUTIVE OFFICER OF ENSURE
Han Meng Siew is the Chief Executive Officer of Ensure. He is responsible for
the overall operations, sales and business development and profit and loss
management of Ensure. He has more than 40 years of engineering experience
with expertise in the fields of engineering services in the overhauling of rotating
and reciprocating equipment, chemical cleaning, process decontamination and
commissioning of process plants for the petrochemical industries in the Asia Pacific
region. He started his career with Sembawang Shipyard Ltd as an apprentice of
the Fitter Machine Shop and upon graduation, was seconded to Neptune Orient
Lines for a year as a Junior Marine Engineer. Upon his return to the shipyard, he
assumed the role of a Trainee Supervisor and was subsequently transferred to
the Estimation Department to do cost estimation of ship repairs. After being in
the shipyard for 12 years, he left to join Seng Teck Engineering Company as their
Business Development Manager. In 1988, along with 4 other shareholders, they set
up ENSURE Engineering Pte Ltd and became their Commercial Manager. In 1994,
he assumed the role of Managing Director. In August 2003, Dr Han was conferred
by the University of Wisconsin (USA) with a Doctorate Degree of Entrepreneurship.
WONG KAM WAI VINCENTCHIEF EXECUTIVE OFFICER OF ENVIPURE
Wong Kam Wai Vincent is the Chief Executive Officer of Envipure since 2010. He
is responsible for the overall operations, sales and business development and
profit and loss management of Envipure since the completion of our acquisition
of Envipure Pte Ltd in November 2019. He has more than 30 years of engineering
experience in marine and environmental businesses. Prior to 2010, he held various
managerial positions in Singapore, Europe and the Gulf in Keppel. Mr Wong
holds a Bachelor of Engineering (Naval Architecture) degree from Southampton
University, UK and a Masters in Business Administration from Maastricht School
of Management, Netherlands.
TENG POH LIANGCHIEF EXECUTIVE OFFICER OF AUSTIN ENERGY
Teng Poh Liang is the Chief Executive Officer of Austin Energy. He is responsible
for the overall operations, sales and business development and profit and loss
management of Austin Energy. He joined the Group as Group Head of Business
Excellence and Corporate Development in March 2017. He was appointed
as the Chief Operating Officer in October 2017 and Chief Executive Officer in
January 2020 of Austin Energy. Prior to joining us, he held various positions
in small medium enterprises to multinational companies as project engineer,
project manager and general manager. Mr Teng holds a Bachelor of Engineering
(Mechanical & Production Engineering) degree from the Nanyang Technological
University and a Diploma in Marketing Management from Singapore Institute of
Management.
11NORDIC GROUP LIMITED / ANNUAL REPORT 2019
SENIOR MANAGEMENT
CHOU CHEE FATTCHIEF OPERATING OFFICER OF NORDIC FLOW CONTROL
Chou Chee Fatt is the Chief Operating Officer of Nordic Flow Control and is
responsible for the management of the overall operations of Nordic Flow Control.
This includes resource management, planning, project execution, budget and cost
control. He is also responsible for the continuous improvement in process and
overall productivity of the team.
Prior to becoming our Chief Operating Officer, he was our General Manager, Design
Software, Technical Support and he was responsible for leading the design and
software engineers to provide software and design capabilities to our project team
as well as to offer technical support on our products. From 1997 to 2001, he was a
project engineer at Flexlink Systems Pte Ltd. From 2002 to 2003, he was a project
engineer at Spraying System Pte Ltd. Prior to joining us in 2003, he was a project
engineer at Tyco Building Services Pte Ltd. Mr Chou holds a Bachelor of Engineering
(Electrical & Electronic Engineering) degree and a Master of Science (Communication
Software & Networks) degree from the Nanyang Technological University.
JAMIL BIN PUNGOTCHIEF OPERATING OFFICER OF MULTIHEIGHT
Jamil is the Chief Operating Officer of Multiheight. He is responsible for the
management of the overall operations of Multiheight. This includes resource
management, planning, project execution, budget and cost control. He is also
responsible for the continuous improvement in process and overall productivity of
the team. Prior to becoming our Chief Operating Officer in January 2020, he was
our Operations Manager and he joined our our Group in 2007. Mr Pungot holds a
Diploma in Marine Engineering from Singapore Polytechnic.
LIM BEE HONG SAMANTHAHEAD OF BUSINESS EXCELLENCE, CHINA & GENERAL MANAGER, NORDIC SUZHOU
Lim Bee Hong Samantha is the Head of Business Excellence, China and is
responsible for all aspects relating to internal controls, risk management and
business process improvements of our China subsidiaries as well as serving
as country head for Nordic Suzhou. From 1995 to 1999, she was an accounts
executive at Planet Hollywood (Asia) Pte Ltd. From 2001 to 2004, Samantha was
an accounts supervisor at International Refinery Services Pte Ltd. From 2004 to
2007, she was our Group accountant, and from 2007 to 2008, she was a senior
accountant at CapitaLand Limited. From 2008 to 2009, she was Head, Business
Control of Nordic Flow Control. Ms Lim holds a Bachelor of Commerce Degree in
Accounting and Banking from Curtin University of Technology.
12 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
SENIOR MANAGEMENT
WANG LAI SUANCHIEF OPERATING OFFICER OF ENSURE
Wang Lai Suan is the Chief Operating Officer of Ensure. He is responsible for
the management of the overall operations of Ensure. This includes resource
management, planning, project execution, budget and cost control. He is also
responsible for continuous improvement in process and overall productivity of
the team. He has more than 36 years of experience in the fields of ship repairing,
manufacturing, chemical cleaning as well as engineering maintenance of the
national infrastructure and petrochemical plants. He was also one of the directors
and shareholders of Ensure from 2001 to 2017. Before joining Ensure, he was the
Senior Vice President of Dovechem Terminals Holdings Limited. Prior to that, he
worked in Sembawang Shipyard from 1982 to 1988 where he reached the position
of Ship Repair Manager. Mr Wang holds a Bachelor of Engineering (Mechanical)
degree from National University of Singapore and a Graduate Diploma in Marketing
from the Marketing Institute of Singapore and Diploma in Marketing from the The
Chartered Institute of Marketing (UK).
LEE MEI HUE JEANETTECHIEF OPERATING OFFICER OF ENVIPURE
Lee Mei Hue Jeanette is the Chief Operating Officer of Envipure. She is responsible
for the management of the overall operations of Envipure. This includes resource
management, planning, project execution, budget and cost control. She is also
responsible for continuous improvement in process and overall productivity of
the team, sales and business development of Envipure. Prior to becoming our
Chief Operating Officer, she was our General Manager, Sales in Nordic Flow
Control. She joined our Group in 2003. Ms Lee holds a Bachelor of Electrical
and Electronics Engineering degree from University of Sunderland and Diploma in
Electrical Engineering from Singapore Polytechnic and Specialist Diploma in Marine
& Offshore Technology from Ngee Ann Polytechnic.
CHIA MENG RUGROUP CHIEF FINANCIAL OFFICER
Chia Meng Ru was appointed as our Group Chief Financial Officer on 17 August
2017 and Company Secretary on 17 October 2017. She is responsible for the
Group’s back office functions which includes finance, human resource, payroll,
legal and compliance, office administration and information technology. She
manages human resource, information technology, office administration, capital,
finance, treasury, risk management, tax, legal and compliance matters and mergers
and acquisitions. She supports the Group Executive Chairman in the Group’s
strategic business planning process and participates in all major investment
initiatives and decisions, providing sound financing options and optimal structuring
of major projects, apart from building and enhancing shareholder and investor
relations. Prior to joining our Group, she was an audit partner in RSM Chio Lim
LLP. Ms Chia holds a Bachelor of Accountancy (Honours) degree from Nanyang
Technological University. She is a member of the Institute of Singapore Chartered
Accountants and a Fellow Member of Chartered Accountants Australia and New
Zealand.
13NORDIC GROUP LIMITED / ANNUAL REPORT 2019
SENIOR MANAGEMENT
NET PROFIT CAGR OF
21%from FY2011 to FY2019
REVENUE
$84.6 million$91.7 million in 2018
NET PROFIT
$8.5 million$11.3 million in 2018
EBITDA
$13.4 million$16.0 million in 2018
ORDER BOOK
AS AT 31 DECEMBER 2019
$92.0 million$92.7 million as at 31 December 2018
MARKET CAPITALISATION(3)
AS AT 31 DECEMBER 2019
$114 million$157 million as at 31 December 2018
RETURN ON INVESTED CAPITAL(1)
15.7%19.4% in 2018
RETURN ON EQUITY(3)
10.2%14.4% in 2018
EARNINGS PER SHARE
2.2 cents2.9 cents in 2018
NET ASSET VALUE PER SHARE
21.9 cents20.6 cents in 2018
RETURN ON ASSET(3)
3.4%7.5% in 2018
TOTAL DEBT TO EQUITY(3)
52.5%60.8% in 2018
(1) Means that for every $1 of capital invested in the business, the Company earned about $15 in profit. Calculated based on profit before interest and tax/tangible capital employed which is tangible non-current asset + current asset – current liabilities (trade and other payables, other liabilities, income tax payable) – excess cash. If assets held for sale is excluded, the ROIC is 22% for 2018 and 18.0% for 2019.
(2) Included liabilities of a disposal group classifi ed as held for sales under FRS 105. If calculated base on (total borrowings less cash)/equity, total debt to equity would be net debt of 19% for 2018 and net debt of 2% for 2019.
(3) Source: Yahoo! fi nance, 16 March 2020.
14 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
FINANCIAL HIGHLIGHTS AND INVESTMENT SCORECARD
REVENUE AND PROFIT MARGIN
NET PROFIT (S$'m)
FY2014FY2013 FY2016 FY2017
4.6
6.1
7.9
10.5
12.7
15.3
8.5
FY2012 FY2015 FY2019
CAGR of 21%
FY2014FY2013 FY2016 FY2017
26%
8%
24%
9%
26%
11%
28%
13%
31%
33%
16%17%
25%
10%
60.366.2
72.480.5 81.9 91.5
84.6
FY2012 FY2015 FY2019
Revenue (S$’m) Gross Profi t Margin Net Profi t Margin
REVENUE BY PROJECT AND MAINTENANCE SEGMENT
FY2014FY2013 FY2016 FY2017FY2015 FY2019
Project Services Maintenance Services Others
44.1
16.2 17.8
48.4
15.0 21.621.4
36.6 37.8
1.4 3.8
57.4 58.9 60.5 53.5 50.1
FY2012
12%
25%
91.7
FY2018
11.3
FY2018
43.0
41.6
FY2018
15NORDIC GROUP LIMITED / ANNUAL REPORT 2019
FINANCIAL HIGHLIGHTS
OPERATIONS REVIEW
The Group’s System Integration (“SI”) division offers integrated control and management systems for newly built ships
as well as ships that require upgrades or conversions. SI division designs, procures, develops and manufactures actuators,
valves and other components for assembly and integration into valve remote control systems, tank gauging systems, anti-
heeling systems, alarm monitoring and power management systems used by customers in their vessels.
The Group’s Maintenance, Repair and Overhaul (“MRO”) and Trading division provides customers with after-sales
requests for maintenance, repairs and overhauls for the vessels.
The Group’s Precision Engineering (“PE”) division designs and builds tooling systems, and provides turnkey production
solutions to customers in the marine, oil and gas, aerospace, medical and electronic manufacturing services industries.
The Group’s Scaffolding Services (“SS”) division is an established leader in metal scaffold works servicing the process,
construction and marine industries, offering a full suite of scaffolding services including design, erection, modifi cation and
dismantling, sales and rental.
The Group’s Insulation Services (“IS”) division specialises in thermal and cryogenic insulation, thermal spray aluminium
and passive fi reproofi ng services in the petrochemical, pharmaceutical, marine, oil and gas industries.
The Group’s Petrochemical & Environmental Engineering Services (“PEES”) division provides repairs, maintenance,
operations and plant turnaround services for public environment engineering installations, energy installations, marine and
offshore industries, manufacturing industries, oil and petrochemical industries.
The group’s Cleanroom, Air and Water Solutions Engineering Services (“CAW”) provides tools hook up services, air
pollution control scrubbers and water treatment plants for the semiconductor, oil and gas, power plant and municipality
sectors.
In FY2015, the Group reorganised the business divisions into two major business segments namely Project Services and
Maintenance Services. The change was to better reflect the nature of the revenue streams and type of products and
services rendered. Project Services segment includes projects that requires engineering, design, procurement, construction,
machining, scaffolding works, insulation services and passive fi reproofi ng services. Revenue is usually from capital projects
which are non-recurring. Maintenance Services segment includes maintenance and repair services, trading and supply of
material, spare parts and components. Maintenance Services segment revenue is recurring and the contracts are usually for
a period of 1 to 3 years.
16 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
FINANCIAL AND OPERATION REVIEW
FINANCIAL REVIEW FOR FY2019
The Group’s revenue declined 8% from $91.7 million in FY2018 to $84.6 million in FY2019. This was mainly attributed to less
Project Services of $8.5 million or 17% and the absence of sales of carbon allowance in Others business segment of $3.8
million. However, revenue from Maintenance Service segment contributed revenue of $43.0 million, up $5.2 million or 14% as
compared to $37.8 million in FY2018.
Geographical Information
Geographically, the Group’s Singapore market revenue contributed $68.4 million in FY2019 as compared to $69.5 million in
FY2018. In conjunction, the Group’s China market revenue contributed $22.2 million in FY2019 as compared to $16.3 million
in FY2018.
Gross profi t and gross profi t margin
Gross profit declined $2.1 million or 9% from $23.3 million in FY2018 to $21.3 million in FY2019. Gross profit margin
remained constant at approximately 25% for FY2018 and FY2019.
Other income and gains
Other income and gains declined $0.5 million or 15% from $3.4 million in FY2018 to $2.9 million in FY2019 mainly due to
lower gain on disposal of plant and equipment of $0.4 million or 76%, lower other income and government grant income of
approximately $0.1 million or 18% each. This decrease was offset by an increase in other payables written back – Ensure
vendors of $0.1 million. This write back was because the payable was no longer payable.
Revenue by Business division Revenue by Geographical divisionRevenue by Project and Maintenance
Project 41.6,
49%
Maintenance 43.0,
51%
PEES 15.1,
18%
CAW 5.7,
6%
SI 12.5,
15%
PE 16.0,
19%
SS 22.0,
26%
IS 13.3,
16%
Singapore,
68.381%
China,
16.319%
FY2019 31/12/2019
17NORDIC GROUP LIMITED / ANNUAL REPORT 2019
FINANCIAL AND OPERATION REVIEW
Distribution costs
Distribution costs remained constant at $0.7 million.
Administrative expenses
Administrative expenses decreased by approximately $0.3 million or 2% from $12.3 million in FY2018 to $12.0 million in
FY2019 mainly due to lower staff costs.
Finance costs
Interest expenses increased marginally by $0.03 million from $1.5 million in FY2018 to $1.53 million in FY2019, mainly due to
increased borrowings and higher interest rate.
Other losses
Other losses increased approximately $0.6 million or 487% from $0.1 million in FY2018 to $0.7 million in FY2019. This was
mainly due to higher foreign exchange losses due to the weakening of United States Dollar against the Singapore dollar.
Foreign exchange loss was $0.6 million in FY2019 as compared to foreign exchange gain of $0.3 million in FY2018.
Income tax expenses
Effective income tax rate remained constant at approximately 8% for FY2018 and FY2019. The lower effective tax rate is due
to merger & acquisition allowance utilised.
Notwithstanding the prolonged weakness in the offshore marine, oil and gas industries, Nordic delivered net profi t after tax
attributable to shareholders of $8.48 million in FY2019.
The group proposed a fi nal dividend of 0.419 Singapore cents per share to reward shareholders.
$’000
31 December
2019
31 December
2018
Non-current assets 64,560 59,818
Current assets 97,277 92,042
Non-current liabilities 12,895 12,822
Current liabilities 63,044 58,046
Total equity 85,898 80,992
Cash and cash equivalents 43,200 39,232
Net asset value per share (cents) 21.9 20.6
18 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
FINANCIAL AND OPERATION REVIEW
1 Based on 391,904,000 (FY2018: 392,519,000) ordinary shares in issue excluding treasury shares as of 31 December 2019
Non-current assets
Non-current asset increased approximately $4.7 million or 8% from approximately $59.8 million as at 31 December 2018 to
approximately $64.6 million as at 31 December 2019. The increase was mainly due to recording of right-of-use asset due to
the new accounting standard of $3.5 million, increase in intangible asset less amortisation from the acquisition of Envipure
Group of approximately $0.7 million and deferred tax asset of $0.1 million. These increases were offset by a decrease in
property, plant and equipment of approximately $0.5 million due to depreciation charge of property, plant and equipment
during the year.
Current assets
Current asset increased approximately $5.2 million or 6% from approximately $92.0 million as at 31 December 2018 to $97.3
million as at 31 December 2019. This increase was due to increase in cash and cash equivalents of approximately $4.0
million mainly contributed by the newly acquired subsidiaries Envipure Group and inventories of approximately $2.0 million.
Increase in inventories was for deliveries in 1Q2020. Excluding the other assets arising from the acquisition of Envipure Group
of $3.7 million, the decrease in other assets is $5.0 million. This is mainly due to a decrease in unbilled receivables. This
decrease is offset by an increase in deposit to secure service. Excluding the trade and other receivables (less allowance for
impairment) arising from the acquisition of Envipure Group of approximately $7.7 million, trade and other receivables reduced
approximately $7.1 million from $23.0 million in FY2018 to $15.9 million in FY2019. The decrease is mainly due to collections
from customers.
Non-current liabilities
Non-current liabilities increased by approximately $0.1 million or 1% from approximately $12.8 million as at 31 December
2018 to approximately $12.9 million as at 31 December 2019. The increase was mainly due to provision contributed by
Envipure Group of $0.6 million and increase of lease liabilities of approximately $3.4 million due to recording of right-of-use
liabilities due to the new accounting standard. These increases were offset by a decrease in other fi nancial liabilities due to
repayment of bank borrowings of $2.0 million and decrease in other payables of $2.1 million. Other payables reduced due to
the write back and payment to Ensure vendors.
Current liabilities
Current liabilities increased approximately $5.0 million or 9%, from approximately $58.0 million as at 31 December 2018 to
$63.0 million as at 31 December 2019. The increase was due to the increase of other fi nancial liabilities of approximately
$2.7 million due to more borrowings. Arising from the acquisition of Envipure Group, there were also increases in trade and
other payable of approximately $4.2 million, income tax payable of approximately $1.0 million, provisions of approximately
$1.7 million and other liabilities of approximately $0.6 million. These increases was offset by a decrease in liabilities held for
sale under SFRS(i) 5 of approximately $5.4 million and from the write back and payment to Ensure vendors of approximately
$2.0 million.
Equity
Our capital and reserves increased by approximately $4.9 million or 6% from approximately $81.0 million as at 31 December
2018 to approximately $85.9 million as at 31 December 2019 mainly due to the increase in retention of net profit from
FY2019 of approximately $5.4 million, offset by increase of treasury shares of approximately $0.2 million and decrease of
other reserve of approximately $0.3 million.
We continue to maintain a healthy cash position with approximately $43.2 million in cash and bank balances as at the end of
FY2019, while net asset value per share strengthen from 20.6 Singapore cents as at 31 December 2018 to 21.9 Singapore
cents as at 31 December 20191.
19NORDIC GROUP LIMITED / ANNUAL REPORT 2019
FINANCIAL AND OPERATION REVIEW
CASH FLOW REVIEW FOR FY2019
$’000 FY2019 FY2018
Net cash generated from operating activities 16,208 9,043
Net cash generated used in investing activities (2,451) (4,042)
Net cash used in fi nancing activities (9,470) (6,453)
Cash and cash equivalents at the end of the year 43,200 39,232
In FY2019, net cash generated from operating activities amounted to approximately $16.2 million. We generated net cash
of approximately $13.4 million from operating profi ts before working capital changes. Net cash generated from operations
amounted to approximately $17.1 million. This was mainly due to cash infl ow from decrease in trade and other receivables of
approximately $7.1 million, cash infl ow from decrease in other assets of approximately $5.0 million, cash infl ow from increase
in provision of approximately $1.4 million and increase in other liabilities of approximately $0.1 million. These cash infl ows
were offset by cash outfl ow from the decrease in trade and other payables of approximately $9.8 million and an increase in
inventories of approximately $0.2 million. Our operating cash fl ow from operations was reduced by income tax payments of
approximately $0.9 million.
Net cash of approximately $2.5 million was used in investing activities mainly from the purchase of property, plant and
equipment of approximately $3.2 million. This cash outfl ow was offset by proceeds from disposal of plant and equipment
and interest received of approximately $0.2 million and $0.5 million.
Net cash of approximately $9.5 million was used in financing activities. This was mainly due to dividend payment
of approximately $3.1 million, interest payment of approximately $1.4 million, decrease in other financial liabilities of
approximately $19.5 million and purchase of treasury shares of $0.2 million. Cash used was offset by an increase in new
borrowing of $15 million.
20 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
FINANCIAL AND OPERATION REVIEW
Deepavali Celebration
COMMITMENT TO OUR SHAREHOLDERS
Our Group is committed to sound corporate governance
and transparent practices by providing existing and potential
investors with timely and accurate information. Such
disclosure helps investors to better evaluate the Group, as
well as make informed investment decisions. Information of
our Group is available via the following channels:
1. All our corporate announcements, including interim,
ful l-year results and presentation materials, are
published on the Singapore Exchange’s SGXNet;
2. Our Group’s corporate website with easy-to-access
business information of our subsidiaries – http://www.
nordicgrouplimited.com;
3. Our investor relations email: [email protected];
4. Investor, analyst and media briefings and site visits
in relation to our corporate updates. For further
information, please email to nordic@fi nancialpr.com.sg
or register via the link in the investor’s briefi ng invites on
our website http://www.nordicgrouplimited.com;
5. Our sustainability report: http://www.nordicgrouplimited.
com;
6. Our annual general meeting held annually in April where
our shareholders and management can interact.
COMMITMENT TO THE ENVIRONMENT
We are committed to environmental protection by reducing
carbon emissions, preventing pollution, minimizing wastage,
and utilizing our resources efficiently. To reduce pollution,
our Group sets strict operating procedures to handle waste
treatment and disposal, while adopting greener solutions
in our daily operations. Our ongoing efforts to protect the
environment also includes implementing a waste recycling
programme, which involves the installation of separate bins
to collect reusable waste for reuse. Additionally, chemicals
and hydrocarbon waste products, such as paints and
engine oil, are treated with special care and disposed
through proper biohazard disposal channels.
COMMITMENT TO OUR COMMUNITY
Our Group is committed and constantly looking for ways
to give back to our community. In FY2019, we actively
took part in several community events as well as making
cash donations to community organizations as part of our
dedication to this very ideal.
In July 2019, our Group participated in YMCA’s Proms
@ the Park 2019. More than 550 volunteers, including
30 from the group, met with over 500 beneficiaries from
various Voluntary Welfare Organisations (“VWOs”) to enjoy
a concert, carnival and the Proms’ very fi rst Makers’ Market
at the Lawn @ Marina Bay. Our President, Mdm Halimah
Yacob, was the guest of honor at the event. The event
sought to encourage social bonding and enhancement of
social skills through a shared heritage where volunteers
discovered the privilege and joy of spending time with the
beneficiaries as one community. The Group was honored
to be recognized as the sole Silver Sponsor to the event,
and participation in this event demonstrates the Group’s
commitment to helping those that are less privileged.
This year, our annual blood donation drive was held in
October at Ensure Engineering at 1 Tuas Ave 10 Singapore
639125, the off icial Blood Donation Centre for the
21NORDIC GROUP LIMITED / ANNUAL REPORT 2019
OUR COMMITMENT TO CORPORATE SOCIAL RESPONSIBILITY
Blood Donation 2019
Deepavali Celebration
Singapore Red Cross Society. The collected blood would
be used to save lives during emergencies and to sustain the
lives of people with medical conditions.
COMMITMENT TO OUR EMPLOYEES
Occupational safety and health
Working in a highly regulated and hazardous industry, our
Group adopts a culture where health and safety are of
paramount importance. Our Group has set a policy that
demands us to adhere to relevant legal and regulatory
requirements and recognized industry standards. Our
Group places high emphasis on safety and believes strongly
in maintaining zero occupational injuries, diseases, property
and environmental damage over the course of our work.
We constantly review and improve our internal processes;
conduct proper training and planning to uphold our
safety standards. Our people represent our Group’s most
important assets and we strive to continuously create a safe
and healthy working environment for all our employees to
thrive in.
Safety awareness and best practices begin with individual
employees and transcend into the Group’s overall safety
culture. The Group will continue to promote a safe working
culture as well as conduct reviews to improve. In 2019,
Austin Energy was awarded the bizSAFE Enterprise
Exemplary Award 2019 for the first time. This award is
testament to the Group’s commitment in promoting a safe
work culture and providing a safe environment for our
clients and employees.
Workforce development
Our people are our most important asset. We believe
in providing our employees a safe environment to work
in, both from an internal control and industry standard
perspective. We remain committed to provide equal and
ample opportunities for employees to upgrade and hone
their skill sets in order for them to excel.
To highlight the Group’s ability in training and aligning its
employees with the industry standards, we have a Certifi ed
On-the-job Training Centre (“COJTC”) at Mutiheight and
Ensure. At the COJTC, we are able to integrate new
employees with induction programmes and on-the-job
training. Employees are also encouraged to upgrade
22 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
OUR COMMITMENT TO CORPORATE SOCIAL RESPONSIBILITY
themselves by attending courses and specialized training.
With these sound policies and procedures in place, Nordic
has positioned itself as an employer of choice in the
industry.
WORK-LIFE BALANCE
The Group understands the importance of work-life
balance. As part of our commitment to improving the
working environment, various company-wide events will be
held throughout the year to show the Group’s gratitude as
well as providing an opportunity for staff to bond. During
the Lunar New Year (CNY) period, the Group organized a
CNY Lunch for the employees, regardless of race, language
or religion. Attendees also had a chance to win some lucky
draw prizes. Towards the middle of the year when it was the
durian season, the Group took the opportunity to organize a
Fruit Party, with fresh rambutan, coconut, mangosteen and
of course durian. We also had our annual dinner and dance
in November 2019 where our long serving employees
received their 5, 10, 15 and 30 years long service award.
Our Christmas lunch in December 2019 sum up all the
events for the year. The events served as valuable bonding
time amongst coworkers and between top management
and staff.
COMMITMENT TO OUR CUSTOMERS
Our Group firmly believes that a returning customer is
the best recognition of our hard work and dedication,
supported by our Group’s safety and quality track records
and capabilities. We strive to deliver the highest satisfaction
to our valued customers by regularly meeting and even
surpassing their expectations of the Group.
As such, the Group emphasizes greatly on our work quality
and value as well as the handling of our customers with
honesty and respect. The Group has established a set of
internal controls and process manuals to adhere to closely
to ensure our work is completed to specification and of
high quality. We also aim to achieve “Best in Class” works
through our ISO 9001:2015 quality management system
requirements, and by continuously investing in the training
and upgrading of our workforce. In addition to these, we
constantly seek for new innovative solutions to keep abreast
with the latest technology and processes in the industry,
as well as conduct regular reviews of our quality policy
requirements in our bid to adhere to stringent product and
service consistency and legal requirements.
As a testament to our Group’s high standards in workplace
safety and quality of our products and solutions, our Group
has won numerous awards and accreditations in FY2019.
For instance, our Group’s subsidiaries were awarded
ExxonMobil APRPC Safety Observation Champion for the
Month – January 2019, ExxonMobil Outstanding Supervisor
Award 2019, PUB Good Safety Award by Jurong Water
Reclamation Plant (JWRP), Croda Business Partner of
the Year Award and Chevron Oronite Bronze Award for
Achieving Good Safety Performance in the Year 2019.
Such awards amplify our Group’s high safety standards, all
rounded capabilities and quality of work completed for our
valued customers. The Group was also actively involved in
industry associations such as:
• Member – ASIA (Access & Scaffold Industry Association)
• Member – ASPRI (Association of Process Industry)
• Member – ASMI (Association of Singapore Marine
Industries)
Dinner and Dance 15 and 20 years long service award Chinese New Year reunion lunch
23NORDIC GROUP LIMITED / ANNUAL REPORT 2019
OUR COMMITMENT TO CORPORATE SOCIAL RESPONSIBILITY
BOARD OF DIRECTORSChang Yeh HongExecutive Chairman
Teo Ling LingExecutive Director and Chief Executive Officer ofNordic Flow Control Pte Ltd
Lee Kim Lian JulianaIndependent Director
Ong HuaIndependent Director
Lee Kok Keng AndrewIndependent Director
AUDIT COMMITTEEOng Hua (Chairwoman)Lee Kim Lian JulianaLee Kok Keng Andrew
REMUNERATION COMMITTEELee Kok Keng Andrew (Chairman)Ong HuaLee Kim Lian Juliana
NOMINATING COMMITTEELee Kim Lian Juliana (Chairwoman)Ong HuaLee Kok Keng AndrewChang Yeh Hong
REGISTERED OFFICE2 Tuas Ave 10Singapore 639126
SHARE REGISTRAR AND SHARE TRANSFER OFFICETricor Barbinder Share Registration Services(A division of Tricor Singapore Pte. Ltd.)80 Robinson Road #02-00Singapore 068898
COMPANY SECRETARYChia Meng Ru, CA (Singapore)
AUDITORSRSM Chio Lim LLPPublic Accountants and Chartered Accountants8 Wilkie Road #03-08Wilkie EdgeSingapore 228095
Partner-in-charge: Yeow Thuan Wee(A member of the Institute of Singapore CharteredAccountants)(Effective from the year ended 31 December 2019)
PRINCIPAL BANKERSBank of China4 Battery RoadBank of China BuildingSingapore 049908
CIMB Bank Berhad50 Raffles Place #09-01Singapore Land TowerSingapore 048623
Citibank N.A.8 Marina View #21-00Asia Square Tower 1Singapore 018960
DBS Bank Ltd.12 Marina BoulevardMarina Bay Financial Centre Tower 3Singapore 018982
Malayan Banking Berhad2 Battery Road #15-01Maybank TowerSingapore 049907
Oversea-Chinese Banking Corporation Limited65 Chulia Street #10-00OCBC Centre EastSingapore 049514
RHB Bank Berhad90 Cecil Street #12-00RHB Bank BuildingSingapore 069531
Standard Chartered Bank8 Marina Boulevard #27-01Marina Bay Financial Centre Tower 1Singapore 018981
United Overseas Bank Ltd80 Raffles Place UOB PlazaSingapore 048624
The Hongkong and Shanghai Banking Corporation Limited21 Collyer Quay #08-01HSBC Building Singapore 049320
24 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE INFORMATION
The Board of Directors (the “Board”) of Nordic Group Limited (the “Company”) and its subsidiaries (the “Group”) is
committed to achieving high standards of corporate governance to ensure investor confidence in the Company as a
trusted business enterprise. The Board and management will continue to uphold good corporate governance practices
to enhance long-term value and returns for shareholders and protect shareholders’ interests.
This report (the “Report”) describes the Group’s corporate governance structures and practices that were in place
during the financial year ended 31 December 2019 with reference made to the principles and provision of the revised
Code of Corporate Governance 2018 (the “2018 Code”) and the accompanying Practice Guidance issued in August
2018 which forms part of the continuing obligations of the Listing Rules of the Singapore Exchange Securities Trading
Limited (“SGX-ST”).
The Board is pleased to report on the compliance of the Group with the Code. Such compliance is regularly reviewed
to ensure transparency and accountability. Where there are deviations from the Code, appropriate explanations have
been provided.
BOARD OF DIRECTORS
Principle 1: The Company is headed by an effective Board which is collectively responsible and works with
Management for the long-term success of the company
The Board provides leadership to the Group by setting the corporate policies and strategic aims. The main functions
of the Board, apart from its statutory responsibilities, are to:
• Approve the broad policies, strategies and financial objectives of the Group and ensure that the necessary
financial and human resources are in place for the Group to meet its objectives;
• Oversee the processes for evaluating the adequacy of internal controls, risk management, financial reporting
and compliance to enable risks to be assessed and managed including safeguarding of shareholders’ interest
and the assets of the Group;
• Review the performance of the management and approving the nominations of directors of the Company and
appointment of key management personnel;
• Approve annual budgets, major funding proposals, investment and divestment proposals;
• Set the Group’s values and standards (including ethical standards) and ensure that the obligations to the
shareholders and other stakeholders are met; and
• Assume responsibility for corporate governance.
The Board exercises due diligence and independent judgement in dealing with the business affairs of the Group and
works with the management to make objective decisions in the interest of the Group.
25NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
The Board has established a number of Board Committees to assist it in discharging its responsibilities. These Board
Committees operate under clearly defined terms of reference. The three (3) Board Committees are:
• Audit Committee (the “AC”)
• Nominating Committee (the “NC”)
• Remuneration Committee (the “RC”)
Every Director is required to promptly disclose any conflict or potential conflict of Interest in relation to a transaction.
Any Director facing a conflict of interest will excuse himself or herself from discussion and decision involving the issue
of conflict.
The Board accepts that while the Board Committees have the authority to examine particular issues and will report back
to the Board with their decisions and/or recommendations, the ultimate responsibility on all matters lies with the Board.
The Board meets at least four (4) times a year to review and approve, inter alia, the quarterly financial results of the
Company, including the half-year and year-end results. The Board also meets as warranted by circumstances to
supervise, direct and control the Group’s business and affairs. Apart from Board meetings, important matters are also
put to the Board for approval by way of circulating resolutions in writing. Telephonic attendance and conference via
audio communication at Board and Board Committee meetings are allowed by the Company’s Constitution.
The attendances of the Directors at meetings of the Board and Board Committees, as well as the frequency of such
meetings during the financial year ended 31 December 2019 (“FY2019”) are as follows:
Board and Board Committees
Board Audit Nominating Remuneration
No. of Meeting Held 4 5 2 2
Board Members
Chang Yeh Hong 4(a) – 2 –
Teo Ling Ling 4 – – –
Ong Hua 4 5(a) 2 2
Lee Kim Lian Juliana 4 5 2(a) 2
Lee Kok Keng Andrew(1) 4 4 1 1(a)
Hew Koon Chan 1 1 1 1
Notes:
(a) Chairman
(1) Mr Lee Kok Keng Andrew was appointed as an Independent Director, Chairman of Remuneration Committee (“RC”), member of Audit Committee
(“AC”) and Nominating Committee (“NC”) on 29 April 2019.
(2) Mr Hew Koon Chan retired as Independent Director on 29 April 2019. He also ceased to be Chairman of AC and a member of NC and RC on
the same date.
Certain matters specifically reserved for decision by the Board are those relating to approval of strategies and objectives
of the Group, announcements of financial results, approval of annual reports and financial statements, convening of
shareholders’ meeting, dividend payment, major contracts, material acquisitions and disposal of assets and corporate
restructuring.
26 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
During the year, management kept the Directors up-to-date on pertinent developments in the business, financial
reporting standards and industry-related matters. Such periodic updates were provided to the Directors to facilitate
the discharge of their duties. The Directors are also encouraged to constantly keep abreast of developments in
regulatory, legal and accounting frameworks that are of relevance to the Group through the extension of opportunities
for participation in the relevant training courses, seminars and workshops as relevant and/or applicable. At each Board
meeting, the Chief Executive Officers (“CEO”) and Chief Operating Officers (“COO”) of the Group’s respective business
divisions update the Board on the business and strategic developments of their respective business divisions.
Incoming Directors are briefed on the Group’s business and Corporate Governance policies by senior management,
to familiarise new directors with business and governance policies. Familiarisation visits, including overseas offices,
are organised, if necessary, to facilitate a better understanding of the Group’s operations. The sessions also allow
the new directors to get acquainted with senior management, thereby facilitating Board interaction and independent
access to senior management.
Board members are encouraged to attend seminars and receive training to improve themselves in the discharge of their
duties as Directors. The Company works closely with professionals to provide its Directors with updates on changes
to relevant laws, regulations and accounting standards.
Newly appointed Directors will be provided with a formal letter setting out their roles and obligations, among other
matters, duties and responsibilities as member of the Board.
Mr Lee Kok Keng Andrew was appointed as an Independent Director of the Company with effect from 29 April 2019.
Concurrently, he was also appointed as Chairman of the RC, and as a member of the AC and the NC of the Company
respectively. He has attended and completed the training on Qualified Listed Entity Director (QLED) conducted by the
Singapore Institute of Directors
The Board considered Mr Lee Kok Keng Andrew to be independent for the purpose of Rule 704(8) of the Listing
Manual of SGXST.
Access to Information
The members of the Board in their individual capacity have access to complete information on a timely basis in the
form and quality necessary for the discharge of their duties and responsibilities. Prior to each Board meeting, the
Directors are each provided with the relevant documents and information to enable them to obtain a comprehensive
understanding of the issues to be deliberated upon to enable them to arrive at an informed decision. Senior management
attends Board Meetings to answer any queries from the Directors. The Directors also have unrestricted access to the
Company’s senior management at all times.
To allow Directors sufficient time to prepare for the meetings, all Board and Board Committee papers are distributed
to Directors in advance of the meeting. Any additional material or information requested by the Directors is promptly
furnished.
In order to ensure that the Board is able to fulfil its responsibilities, the management provides the Board with regular
updates of the financial position of the Group. The Directors have been provided with the phone numbers and email
particulars of the Company’s key management personnel to facilitate separate and independent access.
27NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
The Company Secretary attends and prepares minutes for all Board and Board Committee meetings and is responsible
for ensuring that the Board Meeting procedures are followed and that applicable rules, acts and regulations are
complied with.
As secretary for all the Board Committees, the Company Secretary assists in ensuring coordination and liaison between
the Board, the Board Committees and the management. The Company Secretary assists the Chairman, the Chairman
of each Board Committee and the management in the development of the agendas for the various Board and Board
Committee meetings.
The appointment and removal of the Company Secretary is a matter for the Board as a whole.
Each Director, whether individually or as a group, has the right to seek independent professional advice as and when
necessary, in furtherance of their duties. The cost of such professional advice will be borne by the Company.
Principle 2: The Board has an appropriate level of independence and diversity of thought and background
in its composition to enable it to make decision in the best interests of the company
As at date of this Report, the Board comprises an Executive Chairman, an Executive Director and three (3) Independent
Directors. This composition complies with the Code’s requirement that at least one-third of the Board should be made
up of Independent Directors and non-executive Directors make up a majority of the Board. Each Director has been
appointed on the strength of his calibre, expertise and experience.
The Independent Directors have confirmed that they do not have any relationship with the Company, its related
corporations, its officers or its shareholders with shareholdings of 5% or more in the voting shares of the Company
that could interfere, or be reasonably perceived to interfere, with the exercise of their independent business judgement
with a view to the best interests of the Group.
The NC, in its deliberation as to the independence of a Director, has reviewed, determined and confirmed the
independence of the Independent Directors.
The NC reviews the size and composition of the Board and Board Committees and the skills and core competencies
of its members to ensure appropriate balance of skills and experience. These competencies include accounting and
finance, business acumen, management experience, industry knowledge, strategic planning experience, familiarity with
regulatory requirements and knowledge of risk management. The NC is satisfied that the current size and composition
of the Board and Board Committees is appropriate for effective decision making, having taken into consideration the
nature and scope of the Group’s operations. The NC is also of the view that the Directors possess the necessary
competencies and knowledge to lead and govern the Group effectively.
When necessary, the Independent Directors of the Board will meet among themselves and with the External Auditor
and Internal Auditors without management’s presence.
The Board includes three (3) female Directors in recognition of the importance and value of gender diversity.
28 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
Principle 3: There is a clear division of responsibilities between leadership of the Board and Management,
and no one individual has unfettered powers of decision-making
The Executive Chairman and the CEOs of each of the Group’s respective business divisions are separate persons
to ensure an appropriate balance and separation of power and authority, and clear division of responsibilities and
accountability.
The Executive Chairman bears responsibility for the working of the Board and, together with the AC, ensures the integrity
and effectiveness of the governance process of the Board. Additionally, the Executive Chairman plays a pivotal role in
steering the strategic direction for the Board while respective subsidiary CEO manages the business of the subsidiary
and ensures the execution of the Board’s decisions.
Principle 4: The Board has a formal and transparent process for the appointment and re-appointment of
directors, taking into account the need for progressive renewal of the Board
NOMINATING COMMITTEE
The NC comprises four (4) members, a majority of whom including the Chairman are independent.
Chairman: Lee Kim Lian Juliana (Independent Director)
Members: Lee Kok Keng Andrew (Independent Director)
Ong Hua (Independent Director)
Chang Yeh Hong (Executive Chairman)
The main role of the NC is to make the process of Board appointments and re-appointments transparent and to assess
the effectiveness of the Board as a whole and the contribution of individual Director to the effectiveness of the Board.
When a vacancy arises under any circumstances, or where it is considered that the Board would benefit from the
services of a new Director with a particular skill, the NC, in consultation with the Board, determines the selection criteria
and selects the candidates with the appropriate expertise and experience for the position.
The NC performs the following functions:
– review of succession plans for directors, in particular the appointment and/or replacement of the Chairman, the
Chief Executive Officer and key management personnel.
– make recommendations to the Board on the appointment and re-appointment of directors (including alternate
directors, if applicable).
– regularly review the Board structure, size and composition and make recommendations to the Board with regard
to any adjustments that are deemed necessary.
– determine the process for the search, nomination, selection and appointment of new Board members and assess
nominees or candidates for appointment or election to the Board, determining whether or not such nominee
has the requisite qualifications and whether or not he/she is independent.
– develop a process for the evaluation of performance of the Board, its Board committees and directors.
– determine how the Board’s performance may be evaluated and propose objective performance criteria.
29NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
– assess the effectiveness of the Board as a whole and its Board committees and to assess the contribution by
the Chairman and each individual director to the effectiveness of the Board.
– review training and professional development programs for the Board.
– determine, on an annual basis, if a director is independent.
– recommend directors who are retiring by rotation or are newly appointed to be put forward for re-election.
The Constitution of the Company require one-third of the Directors to retire and subject themselves to re-election by
the shareholders in every Annual General Meeting. In addition, all Directors of the Company shall retire from office at
least once every three years.
Pursuant to the one-third rotation rule, Ms Ong Hua will retire as Director at the forthcoming Annual General Meeting
(“AGM”). Ms Ong Hua will not be seeking re-election as a Director of the Company due to the 9 year rule. Mr Chang
Yeh Hong and Mr Lee Kok Keng Andrew will be seeking re-election under Regulations 106 and 116 of the Company’s
Constitution at the forthcoming AGM.
The NC is satisfied that the Directors retiring in accordance with Regulations 106 and 116 of the Company’s
Constitution at the forthcoming AGM are properly qualified for re-appointment by virtue of their skills, experience and
their contribution in terms of guidance and time devoted to Board affairs.
On the matter of multiple board representations, and to address the issue of competing time commitments, the Board
has endorsed the NC’s recommendation that each Director should not hold in excess of six (6) listed company board
representations.
As at the date of this Report, the Company does not have any alternate Director.
The Company has established the following process for the selection and appointment of new Directors:
• The NC determines a suitable size of the Board and evaluates the balance of skills, knowledge and experience
of members of the Board required to add value and facilitate effective decision-making, after taking into
consideration the scope and nature of the Group’s operations;
• The NC considers various sources of seeking suitable candidate(s) or recommendations from, among others,
Directors, business associates and advisors;
• Short-listed candidate(s) will be required to furnish their curriculum vitae stating in detail, among others, their
qualification, working experience and employment history;
• The NC evaluates candidate(s) in areas of academic and professional qualifications, knowledge and experiences
in relation to the business of the Group, independence status and other present and past directorships; and
• The NC makes recommendation to the Board for approval. The Board is to ensure that the candidate is aware
of the expectations and the level of commitment required.
Key information of each member of the Board including directorships and chairmanships, both present and those held
over the preceding three (3) years, in other listed companies and other major appointments, academic/professional
qualifications, membership/chairmanship in the Board Committees can be found on pages 8 and 9 of this Annual Report.
30 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
Principle 5: The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of
each of its board committees and individual directors
The NC has established an appraisal process to assess the performance and effectiveness of the Board as a whole
as well as to assess the contribution of individual Director. The objective of the annual appraisal is to identify areas
for improvement and to implement appropriate action. The appraisal process focuses on a set of performance criteria
which includes qualitative and quantitative factors such as principal functions, fiduciary duties, attendance record, level
of participation at meetings, and guidance provided to the management.
All Directors are requested to complete a Board Assessment Checklist and Individual Director Form designed to seek
their views on the performance criteria so as to assess the overall performance and effectiveness of the Board and
individual Director. The checklists and forms were completed and submitted to the Company Secretary for collation and
the consolidated responses were presented to the NC for review and discussion before making any recommendations
to the Board. The NC has reviewed the overall performance and effectiveness of the Board and is of the view that the
performance and effectiveness of the Board as a whole has been satisfactory. The NC is also of the view that each
Director has been adequately carrying out his or her duties as a Director of the Company.
The NC has not engaged any external facilitator in conducting the assessment of the Board’s performance. Where
relevant, the NC will consider such engagement.
REMUNERATION COMMITTEE
Principle 6: The Board has a formal and transparent procedure for developing policies on director
and executive remuneration, and for fixing the remuneration packages of individual directors and key
management personnel. No director is involved in deciding his or her own remuneration
The RC comprises three (3) members, all of whom including the Chairman are independent.
Chairman: Lee Kok Keng Andrew (Independent Director)
Members: Ong Hua (Independent Director)
Lee Kim Lian Juliana (Independent Director)
To minimise the risk of any potential conflict of interest, each member of the RC shall abstain from voting on any
resolution in respect of his/her remuneration package.
The Company may also engage an external consultant to advise on all remuneration and related matters of Directors
and senior management, as and when circumstances require to ensure that the Directors’ remuneration is fair and
reasonable and benchmarked against comparable companies.
The Director’s remuneration packages of the Executive Directors and certain key executive officers are based on their
respective service agreements. These include a profit sharing scheme that is performance related to align their interests
with those of the shareholders.
Independent Directors are paid Directors’ fees of an agreed amount and these fees are subject to shareholders’
approval at the Annual General Meeting.
31NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
The principal terms of reference of the RC are as follows:
– review and recommend to the Board a general framework of remuneration for the Board and key management
personnel and to review and recommend to the Board the specific remuneration packages for each director,
key management personnel of the Group and employees who are substantial shareholders of the Company,
or are immediate family members of a director, the Chief Executive Officer or a substantial shareholder of the
Company.
– consider all aspects of remuneration, including termination terms, to ensure they are fair.
– review whether the executive directors and key management personnel should be eligible for benefits under any
long-term incentive schemes which may be set up from time to time and to do all acts necessary in connection
therewith.
– administer the performance based bonus scheme and any other share option scheme or share plan established
from time to time for the directors and key management personnel.
– carry out its duties in the manner that it deems expedient, subject always to any regulations or restrictions that
may be imposed upon the RC by the Board.
The recommendations of the RC are submitted to the Board for endorsement. All aspects of remuneration, including
but not limited to directors’ fees, salaries, allowances, bonuses, options and benefits in kind are reviewed by the RC.
The RC has access to expert professional advice on human resource matters whenever there is a need to consult
externally. In its deliberations, the RC will take into consideration industry practices and norms in compensation in
addition to the Company’s relative performance to the industry and the performance of the individual Director. No
individual Director is involved in deciding his own remuneration.
Principle 7: The level and structure of remuneration of the Board and key management personnel are
appropriate and proportionate to the sustained performance and value creation of the company, taking into
account the strategic objectives of the company
The remuneration packages of the Executive Chairman, Executive Director and key executive officers generally comprise
two components. One component is fixed in the form of a base salary, car allowance and handphone allowance.
The other component is variable consisting of incentive or performance bonuses. The remuneration is appropriate to
attract, retain and motivate the Directors to provide good stewardship of the Company and key executive officers to
successfully manage the Company for the long term.
The incentive and performance bonuses are dependent on the financial performance of the Group or business segments
as the RC strongly supports and endorses the flexible wage system which gives the Group more flexibility to ride through
economic downturns. The RC has adopted set profitability levels to be achieved before incentive bonuses are payable.
32 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
The Independent Directors are paid Directors’ fees for their efforts and time spent, responsibilities and contributions
to the Board, subject to the approval by shareholders at the Annual General Meeting.
There are no termination or retirement benefits that are granted to the Directors. The Company has contractual
provisions to allow the Company to reclaim performance-based components of remuneration from the Executive
Chairman, Executive Director and key executive officers in exceptional circumstances of restatement of financial results.
The Executive Chairman and Director owe a fiduciary duty to the Company and the Company should be able to avail
itself to remedies against the Executive Chairman and Director in the event of such breach of fiduciary duties.
Principle 8: The company is transparent on its remuneration policies, level and mix of remuneration, the
procedure for setting remuneration, and the relationships between remuneration, performance and value
creation
The level and mix of remuneration (in percentage terms) of the Directors for FY2019 is as follows:
Directors’ Remuneration for FY2019
Name
Remuneration
($’000) Fee(a) Salary Bonus Allowance Total
Chang Yeh Hong 712 – 52% 43% 5% 100%
Teo Ling Ling Dorcas 300 – 72% 18% 10% 100%
Lee Kim Lian Juliana 46 100% – – – 100%
Ong Hua 62 100% – – – 100%
Lee Kok Keng Andrew 31 100% – – – 100%
Hew Koon Chan(b) 16 100% – – – 100%
(a) Directors’ fees of $137,000 for FY2019 have been approved by the shareholders at the AGM on 29 April 2019. A one-off Director’s fee of
$15,000 has been proposed for Ms Ong Hua which is subject to approval by shareholders at the AGM on 27 April 2020. An additional Director’s
fee of $1,000 each for additional AC meeting held during the year is subject to approval by shareholders at the AGM on 27 April 2020.
(b) Retired as a director in accordance with Article 104 of the Constitution of the Company at the AGM of the Company held on 29 April 2019 and
did not seek re-election due to the 9-year rule.
No option has been granted to the above Directors.
33NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
The breakdown of remuneration of the Group’s top five key executives (who are not Directors) in percentage terms
for FY2019 is as follows:
Remuneration of Key Executives for FY2019
Total remuneration paid to the top 5 key executives (who are not Directors) for FY2019 is $1,093,537. The breakdown
in percentage terms are set out below:
Name Salary Bonus Allowance Total
Between $250,000 and $350,000
Han Meng Siew 98% – 2% 100%
Below $250,000
Lin Choon Hin 75% 5% 20% 100%
Wang Lai Suan 97% – 3% 100%
Below $200,000
Koh Wei Ming Rodney 62% 7% 31% 100%
Lim Bee Hong Samantha 67% 5% 28% 100%
In considering the disclosure of remuneration of key executives, the Board has regarded the industry conditions in
which the Group operates as well as the confidential nature of such remuneration.
No option has been granted to the above key executives.
Remuneration of Employee who are immediate family members of a Director
Name Related To Remuneration
Bong Boon Hean Cousin of Teo Ling Ling, Executive Director $100,000 to $150,000
Save as disclosed above, there is no other employee who is related to a Director, the CEO or substantial shareholder
and whose remuneration exceeded $100,000 during FY2019.
34 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
Principle 9: The Board is responsible for the governance of risk and ensures that Management maintains
a sound system of risk management and internal controls, to safeguard the interests of the company and
its shareholders
The Board acknowledges that it is responsible for maintaining a sound system of internal controls to safeguard
shareholders’ interests and maintain accountability of its assets but acknowledges that no cost-effective risk
management and internal controls system will preclude all errors and irregularities. While no cost effective internal
control system can provide absolute assurance against loss or misstatement, the Group’s internal controls and systems
have been designed to provide reasonable assurance that assets are safeguarded, operational controls are in place,
business risks are suitably protected, proper accounting records are maintained and financial information used within
the business and for publication, are reasonable and accurate.
The Group has had in place an Enterprise Risk Management (“ERM”) Framework, which governs the risk management
processes of the Group. Risk management capabilities and competencies are continuously enhanced through this
Framework. The ERM Framework also enables the identification, prioritisation, assessment, management and monitoring
of key risks and associated key controls in the Group’s businesses. The key risks of the Group are deliberated by
Management and reported to the AC at least once a year. The AC reviews the adequacy and effectiveness of the ERM
Framework against leading practices in risk management and vis-à-vis the external and internal environments, which
the Group operates.
Complementing the ERM framework is a Group-wide system of internal controls, which includes documented policies
and procedures, proper segregation of duties, approval procedures and authorisations, as well as checks-and-balances
built into the business processes. The Group has in place a risk management process that requires business units to
perform regular assessments of the effectiveness of applicable internal controls. In addition to ensuring that internal
controls and risk management processes are adequate and effective, the AC is assisted by various independent
professional service providers. The external auditor provided assurance over the risk of material misstatements in the
Group’s financial statements. The Internal auditor conducted audit reviews based on the approved internal audit plans.
All audit reports detailing audit findings and recommendations are provided to Management who timely respond to
actions to be taken. The AC monitors closely and timely to ensure proper implementation of the required corrective
action plans are undertaken by Management.
Management has established the Group’s risk profile which identifies the material risks faced by the Group and the
counter measures that are in place to manage or mitigate those risks. As the Group does not have a risk management
committee, the Board and the management assume the responsibility of the risk management function. The Group’s risk
profile is reviewed by the AC and the Board annually to ensure regular assessment and update of the Group’s key risks,
how they are managed, the key personnel responsible for each identified risk type and the various assurance mechanism
in place. It allows the Group to address the on-going changes and the challenges in the business environment, reduces
uncertainties and facilitates the shareholder value creation process. In addition, the Board reviews and determines the
Group’s level of risk tolerance and risk policies, and oversees the design, implementation and monitoring of the risk
management and internal control systems.
The internal auditor carried out internal audit on the system of internal controls and reported their findings to the AC.
The external auditor have also carried out, in the course of their statutory audit, an understanding of the key internal
controls assessed to be relevant to the audit. In this respect, the AC has reviewed the findings of both the s and will
ensure that the Group follows up on the auditors’ recommendations raised during the audit process.
35NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
Based on the Group’s framework of management controls in place, the internal control policies and procedures
established and maintained by the Group, as well as the reviews performed by the external and internal auditors,
the Board, with the concurrence of the AC, is of the opinion that the risk management and internal control systems
of the Group, addressing the financial, operationals, compliance, information technology risks and risk management
systems are adequate and effective as at 31 December 2019 to address the risks that the Group considers relevant
and material to its operations.
The Board and the AC have also received assurances from the Executive Chairman and the Group Chief Financial
Officer that (a) the Company’s internal control and risk management systems in place is adequate and effective in
addressing the material risks of the Company in its current business environment including financial, operational,
compliance and information technology risks; and (b) that the financial records have been properly maintained and the
financial statements give a true and fair view of the Group’s business operations and finances.
Principle 10: The Board has an Audit Committee which discharges its duties objectively
The AC comprises three (3) members, all of whom including the Chairman are independent.
Chairman: Ong Hua (Independent Director)
Members: Lee Kim Lian, Juliana (Independent Director)
Lee Kok Keng Andrew (Independent Director)
The Board is of the view that the AC has the requisite financial management expertise and experience to discharge
its responsibilities properly.
The terms of reference of the AC are as follows:
– review significant financial reporting issues and judgments to ensure integrity of the financial statements of the
Company and any announcements relating to the Company’s financial performance.
– review and report to the Board at least annually the adequacy and effectiveness of the Company’s internal
controls (including financial, operational, compliance and information technology controls) and risk management
systems (such review can be carried out internally or with the assistance of any competent third parties).
– review at least annually the adequacy and effectiveness of the Company’s internal audit function including
ensuring it is staffed with persons with the relevant qualifications and experience.
The internal auditor should carry out its function according to the standards set by nationally or internationally
recognised professional bodies including the standards for the Professional Practice of Internal Auditing set by
The Institute of Internal Auditors.
– ensure that the internal audit function is adequately resourced and has appropriate standing within the Company.
– review the internal audit programme and ensure co-ordination between the and management.
– review the adequacy, effectiveness, independence, scope and results of the Company’s internal audit functions.
– review the adequacy, effectiveness, independence, scope and results of the external
audit functions.
36 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
– approve the hiring, removal, evaluation and compensation of the Head of the Internal Audit function, or
accounting/auditing firm or corporation if the internal audit function is outsourced.
– make recommendations to the Board on (i) the proposals to shareholders on the appointment, re-appointment,
resignation and removal of the external auditor, and (ii) approving the remuneration and terms of engagement
of the external auditor.
– ensure co-ordination where more than one auditing firm or corporation is involved.
– review with the internal and external auditors:
(a) their audit plan, including the nature and scope of the audit before the audit commences;
(b) their evaluation of the system of internal controls;
(c) their audit report; and
(d) their management letters and -management’s responses.
– review interested person transactions (IPTs) falling within the scope of the SGX-ST Listing Manual on a quarterly
basis.
– review the quarterly and full year financial statements of the Company before submission to the Board for
approval, focusing in particular, on:
(a) changes in accounting policies and practices;
(b) major risk areas;
(c) significant adjustments resulting from the audit;
(d) the going concern statement;
(e) compliance with accounting standards;
(f) compliance with stock exchange and statutory/regulatory requirements;
– review the audited financial statements of the Company and the consolidated balance sheet and statement of
comprehensive income, before approval by the Board.
– discuss problems and concerns, if any, arising from quarterly and/or full year audits, in consultation with the s,
where necessary.
– meet with the external and internal auditors without the presence of management, at least annually, to discuss
any problems or concerns they may have.
37NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
– ensure where deficiencies in internal controls have been identified, appropriate and prompt remedial action is
taken by management.
– review the assistance given by management to the s.
– review annually the independence of the external auditor, the aggregate amount of fees paid to the external
auditor for the financial year and the breakdown of the fees paid in total for audit and non-audit services
respectively.
Where the external auditor also provide non-audit services to the Company, the nature and extent of such
services should be reviewed in order to balance the maintenance of objectivity and value for money, and to
ensure that the independence of the auditor would not be compromised.
– review and discuss with the external auditor, any suspected fraud or irregularity, or suspected infringement
of any applicable law, rules or regulations, which has or is likely to have a material impact on the Company’s
operating results or financial position, and management’s response.
– review the policy and arrangements by which staff of the Company or of the Group and any other persons
may, in confidence, raise concerns about possible improprieties in matters of financial reporting or any other
matters and conduct an independent investigation of such matters for appropriate follow-up action pursuant to
the Company’s whistle-blowing program.
– investigate any matter within the Terms of Reference, with full access to and cooperation by management and
full discretion to invite any director or executive officer to attend its meetings, and reasonable resources to
enable it to discharge its function properly.
– report to the Board its findings from time to time on matters arising and requiring the attention of the AC.
– undertake such other reviews and projects as may be requested by the Board.
– undertake such other functions and duties as may be required by statute or the Listing Manual, and by such
amendments made thereto from time to time.
Summary of the Audit Committee’s Activities
The AC met five (5) times during the year under review. Details of members and their attendance at meetings are
provided on page 26. The Group Chief Financial Officer, internal auditor and external auditor are invited to these
meetings. Other members of senior management are also invited to attend as appropriate to present reports.
The AC has explicit authority to investigate any matter within its terms of reference. It has full access to and has had
the full cooperation of the management and employees. It also has the full discretion to invite any Director or any
member of management to attend its meetings.
During FY2019, the AC has met the external auditor and internal auditor, without the presence of the Company’s
management, at least once a year. This meeting enabled the external auditor and internal auditor to raise issues
encountered in the course of their work directly to the AC.
38 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
The AC has reviewed the amount of non-audit related services rendered to the Group by the external auditor, RSM
Chio Lim LLP. During the year 2019, the fees paid to RSM Chio Lim LLP for non-audit related services amounted
to $88,000 or 45% of the audit fee. Being satisfied that the nature and extent of such services will not prejudice the
independence and objectivity of the external auditor, the AC has recommended their nomination for re-appointment
as external auditor of the Company to the Board.
The Company confirms that it is in compliance with Rule 712 and Rule 715 of the SGX-ST Listing Manual.
The Company has put in place a whistle-blowing framework (“Speaking Up Policy”), endorsed by the AC where the
employees of the Group or any other person may, in confidence, raise concerns about possible corporate improprieties
in matters of financial reporting or other matters.
Details of the Speaking Up Policy and arrangements have been made available to all employees of the Group. It has
a well-defined process which ensures independent investigation of issues/concerns raised and appropriate follow-up
action, and provides assurance that whistle blowers will be protected from reprisal within the limits of the law.
The AC reports to the Board on such matters at the Board meetings. Should the AC receive reports relating to serious
offences and/or criminal activities in the Group, the AC and the Board have access to appropriate external advice
where necessary.
There was one reported incident pertaining to the Speaking Up Policy during FY2019.
Financial reporting and significant financial issues
The AC has considered whether accounting standards are consistently applied across the Group and whether
disclosures to the financial statements are clear and sufficient. For the year reported on, the AC reviewed and
approved the scope of the audit plans of the external auditor. In its recommendation to the Board to approve the full
year financial statements, the AC reviewed the results of the audit, significant findings or areas of emphasis and audit
recommendations. The AC also discussed with management the bases of the assumptions and methodologies used
by management in relation to matters of significant impact. In particular, the following key audit matter identified by
the external auditor was discussed with management and reviewed by the AC:
Assessment of impairment of goodwill
Goodwill is required to be assessed annually for impairment. The AC has reviewed the methodology used by
management to determine the recoverable amount of goodwill for impairment assessment. In addition, the AC discussed
with the external auditor on their review of the reasonableness and relevance of the assumptions used in the impairment
assessment and the sensitivity analysis performed. The AC concurred with the management’s conclusion that no
impairment loss was recognised for goodwill as at 31 December 2019 as the carrying amount of all cash-generating
units was lower than their recoverable amounts and that the disclosures in the financial statements were appropriate.
39NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
ACCOUNTABILITY AND AUDIT
Accountability
The Board is accountable to the shareholders and is mindful of its obligations to furnish timely information and to
ensure full disclosure of material information to shareholders in compliance with statutory requirements and the Listing
Manual of the SGX-ST.
The Board reviews and approves the results as well as any announcements before its release. In presenting the annual
financial statements and quarterly announcements to shareholders, it is the aim of the Board to provide the shareholders
with detailed analysis and a balanced and understandable assessment of the Group’s performance, position and
prospects. This responsibility is extended to regulators.
Financial reports and other price-sensitive information are disseminated to shareholders through announcement via
SGXNET.
The Board also reviews legislation and regulatory compliance with management to ensure that the Group complies
with the relevant regulatory requirements.
Internal Audit
The AC approves the hiring, removal, evaluation and compensation of the internal auditor. The internal audit function
(“IA”) of the Company is out-sourced to KPMG Services Pte Ltd (“KPMG”). The IA reviews the effectiveness of key
internal controls, including financial, operational and compliance controls for selected scope of review annually, as
approved by the AC. Procedures are in place for the IA to report independently on their findings and recommendations
to the AC for review. The IA reports primarily to the Chairman of the AC and has full access to the documents, records
properties and personnel of the Group, including access to AC.
The primary functions of internal audit are to help:–
(a) assess if adequate systems of internal controls are in place to protect the assets of the Group and to ascertain
whether control procedures are complied with;
(b) assess if operations of the business processes under review are conducted efficiently and effectively; and
(c) identify and recommend improvement to internal control procedures, where required.
The AC is satisfied that the internal audit function has adequate resources to perform its function effectively. The AC is
satisfied that the internal audit function is staffed by suitably qualified and experienced professionals with the relevant
qualifications and experience.
40 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
The Company’s IA function is independent of the external audit. The IA is a member of the Institute of Internal Auditors
Singapore (“IIA”), a professional internal auditing body affiliated to the Institute of Internal Auditors, Inc. The audit work
carried out is guided by KPMG’s global internal auditing standards and the International Standards for the Professional
Practice of Internal Auditing laid down in the International Professional Practices Framework issued by the IIA. The IA
continues to meet or exceed the IIA Standards in all key aspects. KPMG has confirmed their independence to the AC.
During the year, the IA adopted a risk-based audit approach that focused on material internal controls, including
financial, operational, compliance and information technology controls. Audits were carried out on all significant business
units in the Group. All Group Internal Audit reports are submitted to the AC for deliberation with copies of these reports
extended to the Chairman and CEO, Executive Directors and the relevant key management personnel.
The AC has reviewed the Company’s internal control assessment and based on the internal auditors’ and external
auditors’ reports and the internal controls in place, it is satisfied that there are adequate and effective internal controls
to meet the needs of the Group in its current business environment. The AC is satisfied that the internal audit function
is independent, effective and adequately resourced.
The AC reviews the adequacy and effectiveness of the internal audit function of the Company annually.
No former partner or director of the Group’s EA and IA is a member of the AC.
SHAREHOLDER RIGHTS AND RESPONSIBILITIES
Principle 11: The company treats all shareholders fairly and equitably in order to enable them to exercise
shareholders’ rights and have the opportunity to communicate their views on matters affecting the company.
The company gave shareholders a balanced and understandable assessment of its performance, position
and prospects
The Company’s corporate governance practices promote the fair and equitable treatment to all shareholders.
To facilitate shareholders’ ownership rights, the Company ensures that all material information is disclosed on a
comprehensive, accurate and timely basis via SGXNET, especially information pertaining to the Group’s business
development and financial performance which could have a material impact on the share price of the Company, so as
to enable shareholders to make informed decisions in respect of their investments in our Company.
Shareholders are given opportunity to participate effectively and vote at general meetings of the company, where
relevant rules and procedures governing such meetings are clearly communicated through Annual Report or Circular
to shareholders.
Conduct of Shareholder Meetings
The Company supports active shareholder participation at general meetings. The shareholders are encouraged to attend
the general meetings to ensure high level of accountability and to stay informed of the Group’s strategies and visions.
If shareholders are unable to attend the meetings, the Company’s Constitution allows a shareholder of the Company
to appoint up to two proxy to attend and vote in place of the shareholder.
The Board takes note that there should be separate resolution at general meetings on each substantially separate
issue and supports the Code’s principle as regards to “bundling” of resolutions.
41NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
Resolutions are as far as possible, structured separately and are voted on independently.
All Directors including Chairpersons of the Board, AC, RC and NC and senior management are in attendance at the
Annual General Meetings (“AGMs”) and Extraordinary General Meetings to allow shareholders the opportunity to air
their views and ask Directors or management questions regarding the Company. The external auditor are also invited
to attend the AGMs and are available to assist the Directors in addressing any relevant queries by the shareholders
relating to the conduct of the audit, the preparation and contents of the independent auditors’ report.
Minutes of general meetings, including relevant substantial comments or queries from shareholders relating Board or
the Management will be published on the Company’s website as soon as practicable.
The Company will be conducting its voting at the forthcoming Annual General Meeting by poll where shareholders are
accorded voting rights proportionate to their shareholdings and all votes will be counted.
COMMUNICATION WITH SHAREHOLDERS
Principle 12: The company communicates regularly with its shareholders and facilitates the participation
of shareholders during general meetings and other dialogues to allow shareholders to communicate their
views on various matters affecting the company
The Group is committed to maintaining high standards of corporate disclosure and transparency through timely
communication of information to shareholders and the public. It is the Company’s policy that all shareholders and the
public be informed of all major developments that impact the Group on a timely basis. Communication is made through:
• Annual reports that are issued to all shareholders, soft copies of which may be accessed through the SGX-ST
website;
• Announcement of quarter, half-year and full-year results on the SGX-ST’s - SGXNET;
• Disclosure on the SGXNET;
• Press releases on major developments of the Company; and
• Quarterly shareholders’ briefings.
Principle 13: The Board adopts an inclusive approach by considering and balancing the needs and interests
of material stakeholders, as part of its overall responsibility to ensure that the best interests of the company
are served
The Group has identified stakeholders as those who are impacted by the Group’s business and operations as well as
those who have a material impact on the Group’s business and operations. Such stakeholders include employees,
contractors and suppliers, government and regulators, community, and shareholders and investors. The Company
engages its stakeholders through various channels to ensure that the business interests of the Group are balanced
against the needs and interests of its stakeholders.
The Group maintains a corporate website at www.nordicgrouplimited.com to communicate and engage with
stakeholders.
42 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
Interested Persons Transactions
The Group has established internal control policies to ensure that transactions with interested persons are properly
reviewed and approved, and are conducted at an arm’s length basis.
The Group does not have a general mandate from shareholders for interested person transactions pursuant to Rule
920 of the SGX-ST Listing Manual. For the year under review, there have been interested person transactions but
these are below $100,000 in aggregate.
Securities Transaction
The Group has adopted a policy whereby the Directors and employees are prohibited from dealing in the securities
of the Company while in possession of price-sensitive information as well as during the period commencing one (1)
month before the announcement of the Company’s full year results and two (2) weeks before the announcement of
the Company’s first, second and third quarter financial results until the said results announcement has been made.
The Directors and employees of the Group are to refrain from dealing in the Company’s securities on short-term
considerations.
Directors and employees of the Group are also expected to observe insider trading laws at all times even when dealing
with securities within the permitted trading period.
Material Contracts
There was no material contracts entered into by the Company or any of its subsidiaries involving the interest of any
Director or controlling shareholder in FY2019.
43NORDIC GROUP LIMITED / ANNUAL REPORT 2019
CORPORATE GOVERNANCE REPORT
The directors of the company are pleased to present the accompanying financial statements of the company and of
the group for the reporting year ended 31 December 2019.
1. Opinion of the directors
In the opinion of the directors,
(a) the accompanying financial statements and the consolidated financial statements are drawn up so as to
give a true and fair view of the financial position and performance of the company and, of the financial
position and performance of the group for the reporting year covered by the financial statements or
consolidated financial statements; and
(b) at the date of the statement there are reasonable grounds to believe that the company will be able to
pay its debts as and when they fall due.
The board of directors approved and authorised these financial statements for issue.
2. Directors
The directors of the company in office at the date of this statement are:
Executive Directors:
Chang Yeh Hong
Teo Ling Ling
Independent Directors:
Lee Kim Lian Juliana
Ong Hua
Lee Kok Keng Andrew (Appointed on 29 April 2019)
3. Directors’ interests in shares and debentures
The directors of the company holding office at the end of the reporting year had no interests in shares in or
debentures of the company or other related body corporate as recorded in the register of directors’ shareholdings
kept by the company under section 164 of the Companies Act, Chapter 50 (“the Act”) except as follows:
Direct Deemed
Name of directors and
companies in which
interests are held
At beginning
of the
reporting year
or date of
appointment
if later
At end
of the
reporting
year
At beginning
of the
reporting year
or date of
appointment
if later
At end
of the
reporting
year
The company - Nordic Group Limited Number of shares of no par value
Chang Yeh Hong 6,982,000 7,063,000 210,717,225 210,717,225
Teo Ling Ling 50,000 235,000 32,039,500 32,084,500
Lee Kok Keng Andrew 12,000 82,000 979,800 979,800
44 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
STATEMENT BY DIRECTORS
3. Directors’ interests in shares and debentures (Continued)
By virtue of section 7 of the Act, the above directors with interests are deemed to have an interest in the
company and in all the related body corporate of the company.
The directors’ interests as at 21 January 2020 were the same as those at the end of the reporting year.
4. Arrangements to enable directors to acquire benefits by means of the acquisition of shares and
debentures
Neither at the end of the reporting year nor at any time during the reporting year did there subsist arrangements
to which the company is a party, being arrangements whose objects are, or one of whose objects is, to enable
directors of the company to acquire benefits by means of the acquisition of shares in or debentures of the
company or any other body corporate.
5. Options
During the reporting year, no option to take up unissued shares of the company or other body corporate in the
group was granted.
During the reporting year, there were no shares issued by virtue of the exercise of an option to take up unissued
shares.
At the end of the reporting year, there were no unissued shares under option.
6. Independent auditor
RSM Chio Lim LLP has expressed willingness to accept re-appointment.
7. Report of audit committee
The members of the audit committee at the date of this report are as follows:
Ong Hua (Chairwoman of the audit committee)
Lee Kim Lian Juliana
Lee Kok Keng Andrew
The audit committee performs the functions specified by section 201B (5) of the Act. Among other functions,
it performed the following:
• Reviewed with the independent external auditor their audit plan;
• Reviewed with the independent external auditor their evaluation of the company’s internal accounting
controls relevant to their statutory audit, and their report on the financial statements and the assistance
given by management to them;
45NORDIC GROUP LIMITED / ANNUAL REPORT 2019
STATEMENT BY DIRECTORS
7. Report of audit committee (Continued)
• Reviewed with the internal auditor the scope and results of the internal audit procedures (including those
relating to financial, operational and compliance controls and risk management) and the assistance given
by the management to the internal auditor;
• Reviewed the financial statements of the group and the company prior to their submission to the directors
of the company for adoption; and
• Reviewed the interested person transactions (as defined in Chapter 9 of the Singapore Exchange
Securities Trading Limited’s Listing Manual).
Other functions performed by the audit committee are described in the report on corporate governance included
in the annual report of the company. It also includes an explanation of how independent auditor objectivity and
independence is safeguarded where the independent auditor provides non-audit services.
The audit committee has recommended to the board of directors that the independent auditor, RSM Chio Lim
LLP, be nominated for re-appointment as the independent auditor at the next annual general meeting of the
company.
8. Directors’ opinion on the adequacy of internal controls
Based on the internal controls established and maintained by the company, work performed by the internal and
external auditors, and reviews performed by management, other committees of the board and the board, the
audit committee and the board are of the opinion that the company’s internal controls, addressing financial,
operational and compliance risks, are adequate as at the end of the reporting year 31 December 2019.
9. Subsequent developments
There are no significant developments subsequent to the release of the group’s and the company’s preliminary
financial statements, as announced on 24 February 2020, which would materially affect the group’s and the
company’s operating and financial performance as of the date of this report.
On behalf of the directors
Chang Yeh Hong Teo Ling Ling
Director Director
30 March 2020
46 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
STATEMENT BY DIRECTORS
Report on the audit of the financial statements
Opinion
We have audited the accompanying financial statements of Nordic Group Limited (the “company”) and its subsidiaries
(the “group”), which comprise the consolidated statement of financial position of the group and the statement of
financial position of the company as at 31 December 2019, and the consolidated statement of profit or loss and other
comprehensive income, statement of changes in equity and statement of cash flows of the group, and statement of
changes in equity of the company for the reporting year then ended, and notes to the financial statements, including
accounting policies.
In our opinion, the accompanying consolidated financial statements of the group and the statement of financial position
and statement of changes in equity of the company are properly drawn up in accordance with the provisions of the
Companies Act, Chapter 50 (“the Act”) and Singapore Financial Reporting Standards (International) (“SFRS (I)”) so as to
give a true and fair view of the consolidated financial position of the group and the financial position of the company as
at 31 December 2019 and of the consolidated financial performance, consolidated changes in equity and consolidated
cash flows of the group and the changes in equity of the company for the reporting year ended on that date.
Basis for opinion
We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those
standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our
report. We are independent of the company in accordance with the Accounting and Corporate Regulatory Authority
(“ACRA”) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”)
together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we
have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significant in our audit of the
financial statements of the current reporting year. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
• Assessment of impairment of goodwill
Please refer to Note 2 on accounting policies; Note 2C on critical judgements, assumptions and estimation
uncertainties, Note 15 on goodwill and the annual report on the section on the audit committee’s views and
responses to the reported key audit matters.
As at the reporting year end, the group had goodwill of $29,552,000, which makes up a significant portion of the
group’s total assets. Goodwill is assessed annually for impairment. Management uses the value in use method
to determine the recoverable amount of goodwill. The value in use method requires management to estimate
the future cash flows expected to arise from each of the cash-generating units as well as a suitable discount
rate in order to measure the recoverable amount. In estimating the future cash flows of the cash-generating
units, management forecasted the revenue, growth rates, margins based on presently available information.
47NORDIC GROUP LIMITED / ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORDIC GROUP LIMITED
INDEPENDENT AUDITOR’S REPORT
Key audit matters (Continued)
• Assessment of impairment of goodwill (Continued)
With the assistance of our in-house valuation specialists, we compared the valuation methodology to generally
acceptable market practices and evaluated management’s input to the valuation through discussions with
management, checked to supporting documents where applicable as well as compared the inputs against
available industry data and performed sensitivity analysis on the outcome of the calculations.
We evaluated the adequacy of the disclosures included in the financial statements.
Other information
Management is responsible for the other information. The other information comprises the information included in the
statement by directors and the annual report, but does not include the financial statements and our auditor’s report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of management and directors for the financial statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance
with the provisions of the Act and the financial reporting standards, and for devising and maintaining a system of
internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from
unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to
permit the preparation of true and fair financial statements and to maintain accountability of assets.
In preparing the financial statements, management is responsible for assessing the group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless management either intends to liquidate the group or to cease operations, or has no realistic alternative but to
do so.
The directors’ responsibilities include overseeing the group’s financial reporting process.
48 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORDIC GROUP LIMITED
INDEPENDENT AUDITOR’S REPORT
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
group’s internal control.
c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the group to cease to continue as a going concern.
e) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
49NORDIC GROUP LIMITED / ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORDIC GROUP LIMITED
INDEPENDENT AUDITOR’S REPORT
Auditor’s responsibilities for the audit of the financial statements (Continued)
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on other legal and regulatory requirements
In our opinion, the accounting and other records required by the Act to be kept by the company and by those subsidiary
corporations incorporated in Singapore of which we are the auditors have been properly kept in accordance with the
provisions of the Act.
The engagement partner on the audit resulting in this independent auditor’s report is Yeow Thuan Wee.
RSM Chio Lim LLP
Public Accountants and
Chartered Accountants
Singapore
30 March 2020
Engagement partner – effective from year ended 31 December 2019
50 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORDIC GROUP LIMITED
INDEPENDENT AUDITOR’S REPORT
Group
Notes 2019 2018
$’000 $’000
Revenue 5 84,627 91,694
Cost of sales (63,353) (68,368)
Gross profit 21,274 23,326
Other income and gains 6 2,922 3,448
Distribution costs (735) (687)
Administrative expenses 7 (12,040) (12,326)
Finance costs 8 (1,537) (1,485)
Other losses 6 (704) (120)
Profit before tax from continuing operations 9,180 12,156
Income tax expense 10 (700) (831)
Profit net of tax 8,480 11,325
Other comprehensive loss:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations, net of tax (338) (190)
Other comprehensive loss for the year, net of tax: (338) (190)
Total comprehensive income for the year 8,142 11,135
Profit attributable to owners of the parent, net of tax 8,480 11,325
Total comprehensive income attributable to owners of the parent 8,142 11,135
Earnings per share
Earnings per share currency unit Cents Cents
Basic and diluted 11 2.2 2.9
The accompanying notes form an integral part of these financial statements.
51NORDIC GROUP LIMITED / ANNUAL REPORT 2019
YEAR ENDED 31 DECEMBER 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Group Company
Notes 2019 2018 2019 2018
$ $ $ $
ASSETS
Non-current assets
Property, plant and equipment 13 30,724 30,266 6,403 6,511
Right-of-use assets 14 3,470 – 1,730 –
Goodwill 15 29,552 29,552 – –
Intangible assets 16 665 – – –
Investments in subsidiaries 17 – – 1,350 1,350
Deferred tax assets 10C 149 – – –
Total non-current assets 64,560 59,818 9,483 7,861
Current assets
Assets held for sale 18 8,076 8,076 – –
Inventories 19 12,045 10,095 – –
Trade and other receivables 20 23,611 23,015 20,324 12,264
Other assets 21 10,345 11,624 665 641
Cash and cash equivalents 22 43,200 39,232 23,819 20,092
Total current assets 97,277 92,042 44,808 32,997
Total assets 161,837 151,860 54,291 40,858
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 23 22,439 22,439 22,439 22,439
Treasury shares 23 (1,736) (1,567) (1,736) (1,567)
Retained earnings 65,208 59,795 21,679 8,989
Other reserves 24 (13) 325 – –
Total equity 85,898 80,992 42,382 29,861
Non-current liabilities
Provisions 25 565 – – –
Deferred tax liabilities 10C 3,169 3,013 12 –
Loans and borrowings 26 3,575 5,575 – –
Financial liabilities – lease liabilities 14 3,642 240 1,716 –
Other payables 27 1,944 3,994 – –
Total non-current liabilities 12,895 12,822 1,728 –
Current liabilities
Liabilities of a disposal group classified
as held for sales 18 3,000 8,403 – –
Provisions 25 1,711 – – –
Income tax payable 1,989 1,016 239 75
Loans and borrowings 26 37,494 34,830 8,800 9,600
Financial liabilities – lease liabilities 14 396 158 37 –
Trade and other payables 27 17,667 13,488 1,105 1,322
Other non-financial liabilities 28 787 151 – –
Total current liabilities 63,044 58,046 10,181 10,997
Total liabilities 75,939 70,868 11,909 10,997
Total equity and liabilities 161,837 151,860 54,291 40,858
The accompanying notes form an integral part of these financial statements.
52 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
AS AT 31 DECEMBER 2019
STATEMENTS OF FINANCIAL POSITION
Total
equity
Share
capital
Treasury
shares
Retained
earnings
Other
reserves
$’000 $’000 $’000 $’000 $’000
Group:
Current year:
Opening balance at 1 January 2019 80,992 22,439 (1,567) 59,795 325
Changes in equity:
Total comprehensive income for the year 8,142 – – 8,480 (338)
Dividends paid (Note 12) (3,067) – – (3,067) –
Purchase of treasury shares (Note 23) (169) – (169) – –
Closing balance at 31 December 2019 85,898 22,439 (1,736) 65,208 (13)
Previous year:
Opening balance at 1 January 2018 76,614 22,439 (1,303) 54,963 515
Changes in equity:
Total comprehensive income for the year 11,135 – – 11,325 (190)
Dividends paid (Note 12) (6,493) – – (6,493) –
Purchase of treasury shares (Note 23) (264) – (264) – –
Closing balance at 31 December 2018 80,992 22,439 (1,567) 59,795 325
Total Share Treasury Retained
equity capital shares earnings
$’000 $’000 $’000 $’000
Company:
Current year:
Opening balance at 1 January 2019 29,861 22,439 (1,567) 8,989
Changes in equity:
Total comprehensive income for the year 15,757 – – 15,757
Dividends paid (Note 12) (3,067) – – (3,067)
Purchase of treasury share (Note 23) (169) – (169) –
Closing balance at 31 December 2019 42,382 22,439 (1,736) 21,679
Previous year:
Opening balance at 1 January 2018 28,232 22,439 (1,303) 7,096
Changes in equity:
Total comprehensive income for the year 8,386 – – 8,386
Dividends paid (Note 12) (6,493) – – (6,493)
Purchase of treasury share (Note 23) (264) – (264) –
Closing balance at 31 December 2018 29,861 22,439 (1,567) 8,989
The accompanying notes form an integral part of these financial statements.
53NORDIC GROUP LIMITED / ANNUAL REPORT 2019
YEAR ENDED 31 DECEMBER 2019
STATEMENTS OF CHANGES IN EQUITY
2019 2018
$’000 $’000
Cash flows from operating activities
Profit before tax 9,180 12,156
Adjustments for:
Interest expense 1,537 1,485
Interest income (479) (367)
Gain on disposal of property, plant and equipment (117) (481)
Depreciation of property, plant and equipment 3,040 2,771
Depreciation of right-of-use assets 167 –
Amortisation of intangible assets 55 –
Foreign exchange adjustment unrealised losses/(gains) 58 (424)
Operating cash flows before changes in working capital 13,441 15,140
Inventories (220) 3,192
Trade and other receivables 7,076 (874)
Other assets 5,027 (1,721)
Provisions 1,408 –
Trade and other payables (9,790) (5,017)
Other non-financial liabilities 137 (347)
Net cash flows from operations 17,079 10,373
Income taxes paid (871) (1,330)
Net cash flows from operating activities 16,208 9,043
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired) (Note 29) 83 –
Purchase of property, plant and equipment (Note 22A) (3,183) (10,389)
Disposal of property, plant and equipment 170 5,980
Interest received 479 367
Net cash flows used in investing activities (2,451) (4,042)
Cash flows from financing activities
Dividends paid to equity owners (3,067) (6,493)
Increase in loans and borrowings 15,000 10,000
Interest paid (1,429) (1,485)
Lease liabilities – principal portion paid (66) (405)
Loans and borrowings paid (19,739) (7,806)
Purchase of treasury shares (169) (264)
Net cash flows used in financing activities (9,470) (6,453)
Net increase (decrease) in cash and cash equivalents 4,287 (1,452)
Effects of exchange rate changes on the balance of cash
held in foreign currencies (319) 393
Cash and cash equivalents, statement of cash flows, beginning balance 39,232 40,291
Cash and cash equivalents, statement of cash flows,
ending balance (Note 22) 43,200 39,232
The accompanying notes form an integral part of these financial statements.
54 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
YEAR ENDED 31 DECEMBER 2019
CONSOLIDATED STATEMENT OF CASH FLOWS
1. General
The company is incorporated in Singapore with limited liability. The financial statements are presented in
Singapore dollar and they cover the company (referred to as “parent”) and the subsidiaries.
The board of directors approved and authorised these financial statements for issue on the date of the statement
by directors. The directors have the power to amend and reissue the financial statements.
The principal activities of the company are those of an investment holding company and providing management
and administrative support to its subsidiaries. It is listed on the Singapore Exchange Securities Trading Limited.
The principal activities of the subsidiaries are described in the Notes to the financial statements below.
The registered office is: 2 Tuas Avenue 10, Singapore 639126. The company is situated in Singapore.
Statement of compliance with financial reporting standards
These financial statements have been prepared in accordance with the Singapore Financial Reporting Standards
(International) (“SFRS(I)s”) and the related Interpretations to SFRS(I) (“SFRS (I) INT”) as issued by the Singapore
Accounting Standards Council. They are in compliance with the provisions of the Companies Act, Chapter 50
and with the International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards
Board (IASB).
Accounting convention
The financial statements are prepared on a going concern basis under the historical cost convention except
where a financial reporting standard requires an alternative treatment (such as fair values) as disclosed where
appropriate in these financial statements. The accounting policies in the financial reporting standards may not be
applied when the effect of applying them is not material.The disclosures required by financial reporting standards
may not be provided if the information resulting from that disclosure is not material.
Basis of preparation of the financial statements
The preparation of financial statements in conformity with generally accepted accounting principles requires the
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting year. Actual results could differ from those estimates. The estimates
and assumptions are reviewed on an ongoing basis. Apart from those involving estimations, management has
made judgements in the process of applying the entity’s accounting policies. The areas requiring management’s
most difficult, subjective or complex judgements, or areas where assumptions and estimates are significant to
the financial statements, are disclosed at the end of this footnote, where applicable.
55NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
1. General (Continued)
Basis of presentation
The consolidated financial statements include the financial statements made up to the end of the reporting year
of the company and all of its subsidiaries. The consolidated financial statements are the financial statements
of the group (the parent and its subsidiaries) presented as those of a single economic entity and are prepared
using uniform accounting policies for like transactions and other events in similar circumstances. All significant
intragroup balances and transactions are eliminated on consolidation. Subsidiaries are consolidated from the
date the reporting entity obtains control of the investee and cease when the reporting entity loses control of
the investee.
Changes in the group’s ownership interest in a subsidiary that do not result in the loss of control are accounted
for within equity as transactions with owners in their capacity as owners. The carrying amounts of the group’s
and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. When
the group loses control of a subsidiary it derecognises the assets and liabilities and related equity components
of the former subsidiary. Any gain or loss is recognised in profit or loss. Any investment retained in the former
subsidiary is measured at fair value at the date when control is lost and is subsequently accounted as equity
investments financial assets in accordance with the financial reporting standard on financial instruments.
The company’s separate financial statements have been prepared on the same basis, and as permitted by
the Companies Act, Chapter 50, the company’s separate statement of profit or loss and other comprehensive
income is not presented.
2. Significant accounting policies and other explanatory information
2A. Significant accounting policies
Revenue recognition
The financial reporting standard on revenue from contracts with customers establishes a five-step model to
account for revenue arising from contracts with customers. Revenue is recognised at an amount that reflects
the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a
customer (which excludes estimates of variable consideration that are subject to constraints, such as right of
return exists, trade discounts, volume rebates and changes to the transaction price arising from modifications),
net of any related sales taxes and excluding any amounts collected on behalf of third parties. An asset (goods
or services) is transferred when or as the customer obtains control of that asset. As a practical expedient the
effects of any significant financing component is not adjusted if the payment for the good or service will be
within one year.
Sale of goods – Revenue is recognised at a point in time when the performance obligation is satisfied by
transferring a promised good or service to the customer. Control of the goods is transferred to the customer,
generally on delivery of the goods (in this respect, incoterms are considered).
Services – Revenue from service orders and term projects is recognised when the entity satisfies the performance
obligation at a point in time generally when the significant acts have been completed and when transfer of control
occurs or for services that are not significant transactions revenue is recognised as the services are provided.
This is typically for short term services.
56 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2A. Significant accounting policies (Continued)
Revenue recognition (Continued)
Distinct goods or services in a series – For distinct goods or services in a series such as routine or recurring
service contracts where the promise under the contract is for a specified quantity of goods or services that
meets the over time criteria or is a stand-ready or single continuous service and if the nature of each good
or service is distinct, substantially the same and has the same pattern of transfer or each time increment is
distinct, then revenue is recognised at the amount that the entity has the right to bill a fixed amount for each
unit of goods or service provided.
Distinct goods or services created over time – For long-term service contracts and projects for constructing,
manufacturing or developing an asset the customer value is created over time during the contract period and
it is accounted for as a single performance obligation that is satisfied over time. This is because the customer
simultaneously receives and consumes the benefits of the entity’s performance in processing each transaction
as and when each transaction is processed; the performance creates or enhances an asset (for example, work
in progress) that the customer controls as the asset is created or enhanced; or the performance does not create
an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance
completed to date. The revenue is recognised over time by using the input method. For the input method the
revenue is recognised on the basis of the efforts or inputs to the satisfaction of a performance obligation such
as costs incurred, relative to the total expected inputs to the satisfaction of that performance obligation.
Provisions for losses on contracts – When the current estimates of the total amount of consideration expected
to be received in exchange for transferring promised goods or services to the customer, and contract cost
indicate a loss, a provision for the entire loss on the contract is made as soon as the loss becomes evident. An
adjustment is also made to reflect the effects of the customer’s credit risk. The loss on a contract is reported
as an additional contract cost (an operating expense), and not as a reduction of revenue or a non-operating
expense.
Other income
Interest income is recognised using the effective interest method.
Government grants
Government grants are recognised at fair value when there is reasonable assurance that the conditions attaching
to them will be complied with and that the grants will be received. Grants in recognition of specific expenses
are recognised in profit or loss on a systematic basis over the periods necessary to match them with the related
costs that they are intended to compensate.
57NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2A. Significant accounting policies (Continued)
Employee benefits
Contributions to a defined contribution retirement benefit plan are recorded as an expense as they fall due.
The entity’s legal or constructive obligation is limited to the amount that it is obligated to contribute for the
Singapore employees to an independently administered fund (such as the Central Provident Fund in Singapore,
a government managed defined contribution retirement benefit plan). Certain subsidiaries overseas have defined
contribution retirement benefit plans in which employees are entitled to join upon fulfilling certain conditions. The
assets of the fund may or may not be held separately from those of the entity in an independently administered
fund. The entity contributes an amount equal to a fixed percentage of the salary of each participating employee.
For employee leave entitlement the expected cost of short-term employee benefits in the form of compensated
absences is recognised in the case of accumulating compensated absences, when the employees render
service that increases their entitlement to future compensated absences; and in the case of non-accumulating
compensated absences, when the absences occur. A liability for bonuses is recognised where the entity is
contractually obliged or where there is constructive obligation based on past practice.
Borrowing costs
Borrowing costs are interest and other costs incurred in connection with the borrowings and are recognised as
an expense in the period in which they are incurred. Interest expense is calculated using the effective interest
rate method.
Foreign currency transactions
The functional currency is the Singapore dollar as it reflects the primary economic environment in which the
entity operates. Transactions in foreign currencies are recorded in the functional currency at the rates ruling
at the dates of the transactions. At each end of the reporting year, recorded monetary balances and balances
measured at fair value that are denominated in non-functional currencies are reported at the rates ruling at the
end of the reporting year and fair value measurement dates respectively. All realised and unrealised exchange
adjustment gains and losses are dealt with in profit or loss except when a gain or loss on a non-monetary item
is recognised in other comprehensive income, any exchange component of that gain or loss is recognised in
other comprehensive income. The presentation is in the functional currency.
Translation of financial statements of other entities
Each entity in the group determines the appropriate functional currency as it reflects the primary economic
environment in which the relevant reporting entity operates. In translating the financial statements of such an
entity for incorporation in the consolidated financial statements in the presentation currency the assets and
liabilities denominated in other currencies are translated at end of the reporting year rates of exchange and
the income and expense items for each statement presenting profit or loss and other comprehensive income
are translated at average rates of exchange for the reporting year. The resulting translation adjustments (if any)
are recognised in other comprehensive income and accumulated in a separate component of equity until the
disposal of that relevant reporting entity.
58 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2A. Significant accounting policies (Continued)
Income tax
The income taxes are accounted using the asset and liability method that requires the recognition of taxes
payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequence
of events that have been recognised in the financial statements or tax returns. The measurements of current
and deferred tax liabilities and assets are based on provisions of the enacted or substantially enacted tax
laws; the effects of future changes in tax laws or rates are not anticipated. Tax expense (tax income) is the
aggregate amount included in the determination of profit or loss for the reporting year in respect of current
tax and deferred tax. Current and deferred income taxes are recognised as income or as an expense in profit
or loss unless the tax relates to items that are recognised in the same or a different period outside profit or
loss. For such items recognised outside profit or loss the current tax and deferred tax are recognised (a) in
other comprehensive income if the tax is related to an item recognised in other comprehensive income and (b)
directly in equity if the tax is related to an item recognised directly in equity. Deferred tax assets and liabilities
are offset when they relate to income taxes levied by the same income tax authority. The carrying amount of
deferred tax assets is reviewed at each end of the reporting year and is reduced, if necessary, by the amount
of any tax benefits that, based on available evidence, are not expected to be realised.A deferred tax amount is
recognised for all temporary differences, unless the deferred tax amount arises from the initial recognition of an
asset or liability in a transaction which (i) is not a business combination; and (ii) at the time of the transaction,
affects neither accounting profit nor taxable profit (tax loss). A deferred tax liability or asset is recognised for all
taxable temporary differences associated with investments in subsidiaries except where the reporting entity is
able to control the timing of the reversal of the taxable temporary difference and it is probable that the taxable
temporary difference will not reverse in the foreseeable future or for deductible temporary differences, they will
not reverse in the foreseeable future and they cannot be utilised against taxable profits.
Property, plant and equipment
Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost less
any accumulated depreciation and any accumulated impairment losses. Depreciation is provided on a straight-
line method to allocate the gross carrying amounts of the assets less their residual values over their estimated
useful lives of each part of an item of these assets. The annual rates of depreciation are as follows:
Leasehold properties – 3%
Plant and equipment – 6% to 33%
An asset is depreciated when it is available for use until it is derecognised even if during that period the item is
idle. Fully depreciated assets still in use are retained in the financial statements.
The gain or loss arising from the derecognition of an item of property, plant and equipment is recognised in profit
or loss. The residual value and the useful life of an asset is reviewed at least at each end of the reporting year
and, if expectations differ significantly from previous estimates, the changes are accounted for as a change in
an accounting estimate, and the depreciation charge for the current and future periods are adjusted.
59NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2A. Significant accounting policies (Continued)
Property, plant and equipment (Continued)
Cost also includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing
the asset or component to the location and condition necessary for it to be capable of operating in the manner
intended by management.
Subsequent costs are recognised as an asset only when it is probable that future economic benefits associated
with the item will flow to the entity and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to profit or loss when they are incurred.
Right-of-use assets
The right-of-use assets are accounted and presented as if they were owned such as property, plant and
equipment. The annual rate of depreciation is as follows:
Leasehold properties – 3%
Leases
A lease is a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a
period of time in exchange for consideration. A right-of-use asset is capitalised in the statement of financial
position, measured at the present value of the unavoidable future lease payments to be made over the lease
term. A liability corresponding to the capitalised lease is also recognised, adjusted for lease prepayments, lease
incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling
costs. The right-of-use asset is depreciated over the earlier of the end of the useful life of the right-of-use asset
or the end of the lease term and an interest expense on the recognised lease liability (included in finance costs).
For short-term leases of 12 months or less and leases of low-value assets (such as personal computers and
small office equipment) where an accounting policy choice exists under the lease standard, the lease payments
are expensed to profit or loss as incurred on a straight line basis over the remaining lease term.
Intangible assets
An identifiable non-monetary asset without physical substance is recognised as an intangible asset at acquisition
cost if it is probable that the expected future economic benefits that are attributable to the asset will flow to
the entity and the cost of the asset can be measured reliably. After initial recognition, an intangible asset with
finite useful life is carried at cost less any accumulated amortisation and any accumulated impairment losses.
An intangible asset with an indefinite useful life is not amortised. An intangible asset is regarded as having an
indefinite useful life when, based on an analysis of all of the relevant factors, there is no foreseeable limit to the
period over which the asset is expected to generate net cash inflows for the entity.
The amortisable amount of an intangible asset with finite useful life is allocated on a systematic basis over the
best estimate of its useful life from the point at which the asset is ready for use. The useful lives is as follows:
Order backlog – 2 years
60 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2A. Significant accounting policies (Continued)
Intangible assets (Continued)
Identifiable intangible assets acquired as part of a business combination are initially recognised separately from
goodwill if the asset’s fair value can be measured reliably, irrespective of whether the asset had been recognised
by the acquiree before the business combination. An intangible asset is considered identifiable only if it is
separable or if it arises from contractual or other legal rights, regardless of whether those rights are transferable
or separable from the entity or from other rights and obligations.
Subsidiaries
A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the reporting
entity and the reporting entity is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. The existence and effect of
substantive potential voting rights that the reporting entity has the practical ability to exercise (that is, substantive
rights) are considered when assessing whether the reporting entity controls another entity.
In the reporting entity’s separate financial statements, an investment in a subsidiary is accounted for at cost less
any allowance for impairment in value. Impairment loss recognised in profit or loss for a subsidiary is reversed
only if there has been a change in the estimates used to determine the asset’s recoverable amount since the
last impairment loss was recognised. The carrying value and the net book value of the investment in a subsidiary
are not necessarily indicative of the amount that would be realised in a current market exchange.
Business combinations
A business combination is a transaction or other event which requires that the assets acquired and liabilities
assumed constitute a business. It is accounted for by applying the acquisition method of accounting. The
cost of a business combination includes the fair values, at the date of exchange, of assets given, liabilities
incurred or assumed, and equity instruments issued by the acquirer, in exchange for control of the acquiree.
The acquisition-related costs are expensed in the periods in which the costs are incurred and the services are
received except for any costs to issue debt or equity securities are recognised in accordance with the financial
reporting standard on financial instruments. As of the acquisition date, the acquirer recognises, separately from
goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree
measured at acquisition-date fair values as defined in and that meet the conditions for recognition under the
financial reporting standard on business combinations. If there is gain on bargain purchase, for the gain on
bargain purchase a reassessment is made of the identification and measurement of the acquiree’s identifiable
assets, liabilities and contingent liabilities and the measurement of the cost of the business combination and
any excess remaining after this reassessment is recognised immediately in profit or loss.
61NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2A. Significant accounting policies (Continued)
Goodwill
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business
combination that are not individually identified and separately recognised. Goodwill is recognised as of the
acquisition date measured as the excess of (a) over (b); (a) being the aggregate of: (i) the consideration
transferred which generally requires acquisition-date fair value; (ii) the amount of any non-controlling interest in
the acquiree measured in accordance with the financial reporting standard on business combinations (measured
either at fair value or as the non-controlling interest’s proportionate share of the acquiree’s net identifiable
assets); and (iii) in a business combination achieved in stages, the acquisition-date fair value of the acquirer’s
previously held equity interest in the acquiree; and (b) being the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed measured in accordance with the financial reporting
standard on business combinations.
After initial recognition, goodwill acquired in a business combination is measured at cost less any accumulated
impairment losses. Goodwill is not amortised. Irrespective of whether there is any indication of impairment,
goodwill and also any intangible asset with an indefinite useful life or any intangible asset not yet available for
use are tested for impairment at least annually. Goodwill impairment is not reversed in any circumstances.
For the purpose of impairment testing and since the acquisition date of the business combination, goodwill is
allocated to each cash-generating unit, or groups of cash-generating units that are expected to benefit from the
synergies of the combination, irrespective of whether other assets or liabilities of the acquiree were assigned
to those units or groups of units. Each unit or group of units to which the goodwill is so allocated represents
the lowest level within the entity at which the goodwill is monitored for internal management purposes and is
not larger than a segment.
Inventories
Inventories are measured at the lower of cost (weighted average method and first in first out method) and net
realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale. Cost includes all costs of
purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and
condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of
overheads based on normal operating capacity.
62 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2A. Significant accounting policies (Continued)
Impairment of non-financial assets
Irrespective of whether there is any indication of impairment, an annual impairment test is performed at about the
same time every year on an intangible asset with an indefinite useful life or an intangible asset not yet available
for use. The carrying amount of other non-financial assets is reviewed at each end of the reporting year for
indications of impairment and where an asset is impaired, it is written down through profit or loss to its estimated
recoverable amount. The impairment loss is the excess of the carrying amount over the recoverable amount
and is recognised in profit or loss. The recoverable amount of an asset or a cash-generating unit is the higher
of its fair value less costs of disposal and its value in use. When the fair value less costs of disposal method is
used, any available recent market transactions are taken into consideration. When the value in use method is
adopted, in assessing the value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (cash-generating units). At each end of the reporting year non-
financial assets other than goodwill with impairment loss recognised in prior periods are assessed for possible
reversal of the impairment. An impairment loss is reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been measured, net of depreciation or amortisation, if
no impairment loss had been recognised.
Financial instruments
Recognition and derecognition of financial instruments:
A financial asset or a financial liability is recognised in the statement of financial position when, and only when,
the entity becomes party to the contractual provisions of the instrument. All other financial instruments (including
regular-way purchases and sales of financial assets) are recognised and derecognised, as applicable, using trade
date accounting or settlement date accounting. A financial asset is derecognised when the contractual rights to
the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred
or in which the entity neither transfers nor retains substantially all of the risks and rewards of ownership and it
does not retain control of the financial asset. A financial liability is removed from the statement of financial position
when, and only when, it is extinguished, that is, when the obligation specified in the contract is discharged or
cancelled or expires. At initial recognition the financial asset or financial liability is measured at its fair value plus
or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
63NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2A. Significant accounting policies (Continued)
Financial instruments (Continued)
Classification and measurement of financial assets:
1. Financial asset classified as measured at amortised cost: A financial asset is measured at amortised cost
if it meets both of the following conditions and is not designated as at fair value through profit or loss
(FVTPL), that is (a) the asset is held within a business model whose objective is to hold assets to collect
contractual cash flows; and (b) the contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Typically trade and other receivables, bank and cash balances are classified in this category.
2. Financial asset that is a debt asset instrument classified as measured at fair value through other
comprehensive income (FVTOCI): There were no financial assets classified in this category at reporting
year end date.
3. Financial asset that is an equity investment classified as measured at fair value through other
comprehensive income (FVTOCI): There were no financial assets classified in this category at reporting
year end date.
4. Financial asset classified as measured at fair value through profit or loss (FVTPL): There were no financial
assets classified in this category at reporting year end date.
Classification and measurement of financial liabilities:
Financial liabilities are classified as at fair value through profit or loss (FVTPL) in either of the following
circumstances: (1) the liabilities are managed, evaluated and reported internally on a fair value basis; or (2) the
designation eliminates or significantly reduces an accounting mismatch that would otherwise arise. All other
financial liabilities are carried at amortised cost using the effective interest method. Reclassification of any
financial liability is not permitted.
Cash and cash equivalents
Cash and cash equivalents in the statement of cash flows include bank and cash balances, on demand deposits
and any highly liquid debt asset instruments purchased with an original maturity of three months or less. For
the statement of cash flows the item includes cash and cash equivalents less cash subject to restriction and
bank overdrafts payable on demand that form an integral part of cash management.
64 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2A. Significant accounting policies (Continued)
Fair value measurement
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. When measuring the fair value of an asset
or a liability, market observable data to the extent possible is used. If the fair value of an asset or a liability
is not directly observable, an estimate is made using valuation techniques that maximise the use of relevant
observable inputs and minimise the use of unobservable inputs (eg by use of the market comparable approach
that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models
refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the
asset/liability that market participants would take into account. The entity’s intention to hold an asset or to settle
or otherwise fulfil a liability is not taken into account as relevant when measuring fair value.
Fair values are categorised into different levels in a fair value hierarchy based on the degree to which the inputs
to the measurement are observable and the significance of the inputs to the fair value measurement in its entirety:
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical
assets or liabilities. Level 2 fair value measurements are those derived from inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie
derived from prices). Level 3 fair value measurements are those derived from valuation techniques that include
inputs for the asset or liability that are not based on observable market data (unobservable inputs). Transfers
between levels of the fair value hierarchy are recognised at the end of the reporting period during which the
change occurred.
The carrying values of current financial instruments approximate their fair values due to the short-term maturity
of these instruments and the disclosures of fair value are not made when the carrying amount of current financial
instruments is a reasonable approximation of the fair value. The fair values of non-current financial instruments
may not be disclosed separately unless there are significant differences at the end of the reporting year and in
the event the fair values are disclosed in the relevant notes to the financial statements.
2B. Other explanatory information
Provisions
A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. A provision is made using
best estimates of the amount required in settlement and where the effect of the time value of money is material,
the amount recognised is the present value of the expenditures expected to be required to settle the obligation
using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the obligation.
The increase in the provision due to passage of time is recognised as interest expense. Changes in estimates
are reflected in profit or loss in the reporting year they occur.
65NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2B. Other explanatory information (Continued)
Segment reporting
The reporting entity discloses financial and descriptive information about its consolidated reportable segments.
Reportable segments are operating segments or aggregations of operating segments that meet specified criteria.
Operating segments are components about which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to allocate resources and in assessing the
performance. Generally, financial information is reported on the same basis as is used internally for evaluating
operating segment performance and deciding how to allocate resources to operating segments.
Assets classified as held for sale
Identifiable assets and liabilities and any disposal groups are classified as held for sale if their carrying amount is
to be recovered principally through a sale transaction rather than through continuing use. The sale is expected
to qualify for recognition as a completed sale within one year from the date of classification, except as permitted
by the financial reporting standard on non-current assets held for sale and discontinued operations in certain
circumstances. It can include a subsidiary acquired exclusively with a view to resale. Assets that meet the
criteria to be classified as held for sale are measured at the lower of carrying amount and fair value less costs
of disposal and are presented separately on the face of the statement of financial position. Once an asset is
classified as held for sale or included in a group of assets held for sale no further depreciation or amortisation
is recorded. Impairment losses on initial classification of the balances as held for sale are included in profit or
loss, even when there is a revaluation. The same applies to gains and losses on subsequent remeasurement.
Treasury shares
Where the entity reacquires its own equity instruments as treasury shares, the consideration paid, including any
directly attributable incremental cost is deducted from equity attributable to the entity’s owners until the shares
are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration
received, net of any directly attributable incremental transaction costs and the related income tax effects, is
included in equity attributable to the entity’s owners and no gain or loss is recognised in profit or loss.
2C. Critical judgements, assumptions and estimation uncertainties
The critical judgements made in the process of applying the accounting policies that have the most significant
effect on the amounts recognised in the financial statements and the key assumptions concerning the future,
and other key sources of estimation uncertainty at the end of the reporting year, that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities currently or within the next
reporting year are discussed below. These estimates and assumptions are periodically monitored to ensure they
incorporate all relevant information available at the date when financial statements are prepared. However, this
does not prevent actual figures differing from estimates.
66 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2C. Critical judgements, assumptions and estimation uncertainties (Continued)
Assessment of impairment of goodwill:
The amount of goodwill is tested annually for impairment. This annual impairment test is significant and
the process is complex and highly judgmental and is based on assumptions that are affected by expected
future market or economic conditions. As a result, judgement is required in evaluating the assumptions and
methodologies used by management, in particular those relating to the forecasted revenue growth and profit
margins. The disclosures about goodwill are included in Note 15, which explains that small changes in the key
assumptions used could give rise to an impairment of the goodwill balance in the future. Actual outcomes could
vary from these estimates.
Allowance for trade receivables:
The trade receivables are subject to the expected credit loss model under the financial reporting standard
on financial instruments. The expected lifetime losses are recognised from initial recognition of these assets.
These assets are grouped based on shared credit risk characteristics and the days past due for measuring the
expected credit losses. The allowance matrix is based on its historical observed default rates (over a period of
certain months) over the expected life of the trade receivables and is adjusted for forward-looking estimates.
At every reporting date the historical observed default rates are updated and changes in the forward-looking
estimates are analysed. The loss allowance was determined accordingly. In addition for the larger amounts with
customers, an evaluation is made whether there is a significant change in credit risk by comparing the debtor’s
credit risk at initial recognition (based on the original, unmodified cash flows) with the credit risk at the reporting
date (based on the modified cash flows). Adjustment to the loss allowance is made for any increase or decrease
in credit risk. The carrying amounts might change materially within the next reporting year but these changes
may not arise from assumptions or other sources of estimation uncertainty at the end of the reporting year. The
carrying amount is disclosed in the note on trade and other receivables.
Net realisable value of inventories:
A review is made on inventory for excess inventory and declines in net realisable value below cost and an
allowance is recorded against the inventory balance for any such declines. The review requires management
to consider the future demand for the products. In any case the realisable value represents the best estimate
of the recoverable amount and is based on the acceptable evidence available at the end of the reporting year
and inherently involves estimates regarding the future expected realisable value. The usual considerations
for determining the amount of allowance or write-down include ageing analysis, technical assessment and
subsequent events. In general, such an evaluation process requires significant judgement and materially affects
the carrying amount of inventories at the end of the reporting year. Possible changes in these estimates could
result in revisions to the stated value of the inventories. The carrying amount of inventories at the end of the
reporting year is disclosed in the note on inventories.
67NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
2. Significant accounting policies and other explanatory information (Continued)
2C. Critical judgements, assumptions and estimation uncertainties (Continued)
Useful lives of plant and equipment:
The estimates for the useful lives and related depreciation charges for plant and equipment are based on
commercial and other factors which could change significantly as a result of innovations and in response to
market conditions. The depreciation charge is increased where useful lives are less than previously estimated
lives, or the carrying amounts written off or written down for technically obsolete items or assets that have been
abandoned. It is impracticable to disclose the extent of the possible effects. It is reasonably possible, based
on existing knowledge, that outcomes within the next reporting year that are different from assumptions could
require a material adjustment to the carrying amount of the balances affected. The carrying amount of the
specific asset at the end of the reporting year affected by the assumption is $14,078,000 (2018: $12,853,000).
3. Related party relationships and transactions
The financial reporting standard on related party disclosures requires the reporting entity to disclose: (a)
transactions with its related parties; and (b) relationships between parents and subsidiaries irrespective of
whether there have been transactions between those related parties. A party is related to a party if the party
controls, or is controlled by, or can significantly influence or is significantly influenced by the other party.
The ultimate controlling party is Chang Yeh Hong, a director and significant shareholder.
3A. Related party transactions:
There are transactions and arrangements between the reporting entity and related parties and the effects of
these on the basis determined between the parties are reflected in these financial statements. The related party
balances and transfer of resources, services or obligations if any are unsecured, without fixed repayment terms
and interest or charge unless stated otherwise.
Intragroup transactions and balances that have been eliminated in these consolidated financial statements are
not disclosed as related party transactions and balances below.
3B. Key management compensation:
Group
2019 2018
$’000 $’000
Salaries and other short-term employee benefits 2,261 2,415
68 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
3. Related party relationships and transactions (Continued)
3B. Key management compensation: (Continued)
The above amounts are included under employee benefits expense. Included in the above amounts are the
following items:
Group
2019 2018
$’000 $’000
Remuneration of directors of the company 1,013 1,157
Fees to directors of the company 155 152
Further information about the remuneration of individual directors is provided in the report on corporate
governance.
Key management personnel include the directors and those persons having authority and responsibility for
planning, directing and controlling the activities of the group, directly or indirectly.
4. Financial information by operating segments
4A. Information about reportable segment profit or loss, assets and liabilities
Disclosure of information about operating segments, products and services, the geographical areas, and the
major customers are made as required by the financial reporting standard on operating segments. This disclosure
standard has no impact on the reported financial performance or financial position of the reporting entity.
For management purposes the reporting entity is organised into the following major strategic operating segments
that offer different products and services: (1) Product services, (2) Maintenance services and (3) Others. The
results of all other activities, mainly investment holding which are not included within the two primary segments,
are included in the “Others” segment. Such a structural organisation is determined by the nature of risks and
returns associated with each business segment and it defines the management structure as well as the internal
reporting system. It represents the basis on which the management reports the primary segment information
that is available and that is evaluated regularly by the chief operating decision maker in deciding how to allocate
resources and in assessing the performance. They are managed separately because each business requires
different strategies.
The segments and the types of products and services are as follows:
(1) The Project services segment includes projects that requires engineering, design, procurement,
construction, machining, scaffolding works, insulation services and passive fireproofing services.
(2) The Maintenance services segment includes maintenance and repair services, including trading and
supply of material, spare parts and components.
(3) The Others segment relates to other revenue streams.
69NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
4. Financial information by operating segments (Continued)
4A. Information about reportable segment profit or loss, assets and liabilities (Continued)
Inter-segment sales are measured on the basis that the entity actually used to price the transfers. Internal transfer
pricing policies of the reporting entity are as far as practicable based on market prices. The accounting policies
of the operating segments are the same as those described in the significant accounting policies.
The management reporting system evaluates performances based on a number of factors. However, the primary
measurement to evaluate segment’s operating results is the earnings from operations before depreciation and
amortisation, interests and income taxes (called “EBITDA”).
The following tables illustrate the information about the reportable segment profit or loss, assets and liabilities.
4B. Profit or loss from continuing operations and reconciliations
Project
services
Maintenance
services Others Elimination Group
$’000 $’000 $’000 $’000 $’000
Continuing operations 2019
Revenue by segment
Total revenue by segment 44,089 43,414 – (2,876) 84,627
Inter-segment sales (2,499) (377) – 2,876 –
Total revenue 41,590 43,037 – – 84,627
Recurring EBITDA 3,098 5,733 1,065 3,604 13,500
Inter-segment expenses 1,700 1,904 – (3,604) –
Adjusted EBITDA 4,798 7,637 1,065 – 13,500
Finance costs (349) (872) (316) – (1,537)
Depreciation of property,
plant and equipment (1,166) (1,630) (244) – (3,040)
Depreciation of right-of-use assets – – (167) – (167)
Amortisation of intangible assets (2) (53) – – (55)
3,281 5,082 338 – 8,701
Unallocated:
Interest income 479
Income tax expenses (700)
Profit from continuing
operations 8,480
70 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
4. Financial information by operating segments (Continued)
4B. Profit or loss from continuing operations and reconciliations (Continued)
Project
services
Maintenance
services Others Elimination Group
$’000 $’000 $’000 $’000 $’000
Continuing operations 2018
Revenue by segment
Total revenue by segment 53,704 38,230 6,927 (7,167) 91,694
Inter-segment sales (3,615) (412) (3,140) 7,167 –
Total revenue 50,089 37,818 3,787 – 91,694
Recurring EBITDA 5,046 7,241 618 3,140 16,045
Inter-segment expenses 1,929 1,211 – (3,140) –
Adjusted EBITDA 6,975 8,452 618 – 16,045
Finance costs (446) (1,039) – – (1,485)
Depreciation of property,
plant and equipment (1,241) (1,530) – – (2,771)
5,288 5,883 618 – 11,789
Unallocated:
Interest income 367
Income tax expenses (831)
Profit from continuing operations 11,325
71NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
4. Financial information by operating segments (Continued)
4C. Assets and reconciliations
Project
services
Maintenance
services Others Group
$’000 $’000 $’000 $’000
2019
Reportable segment assets 4,443 3,981 – 8,424
Unallocated:
Assets held for sale 8,076
Cash and cash equivalents 43,200
Inventories 12,045
Trade and other receivables, and other assets 25,532
Property, plant and equipment 30,724
Other non-current assets 33,836
Total group assets 161,837
2018
Reportable segment assets 7,665 4,007 – 11,672
Unallocated:
Assets held for sale 8,076
Cash and cash equivalents 39,232
Inventories 10,095
Trade and other receivables, and other assets 22,967
Property, plant and equipment 30,266
Other non-current assets 29,552
Total group assets 151,860
72 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
4. Financial information by operating segments (Continued)
4D. Liabilities and reconciliations
Project
services
Maintenance
services Others Group
$’000 $’000 $’000 $’000
2019
Reportable segment liabilities 729 58 – 787
Unallocated:
Provision 2,276
Liabilities of a disposal group classified
as held for sale 3,000
Trade and other payables 19,611
Loans and borrowings 41,069
Financial liabilities – lease liabilities 4,038
Income tax payable and deferred tax liabilities 5,158
Total group liabilities 75,939
2018
Reportable segment liabilities – 151 – 151
Unallocated:
Liabilities of a disposal group classified
as held for sale 8,403
Trade and other payables 17,482
Loans and borrowings 40,405
Financial liabilities – lease liabilities 398
Income tax payable and deferred tax liabilities 4,029
Total group liabilities 70,868
4E. Geographical information
Revenue Non-current assets
Group 2019 2018 2019 2018
$’000 $’000 $’000 $’000
China 16,277 22,204 4,071 4,163
Singapore 68,350 69,490 60,340 55,655
84,627 91,694 64,411 59,818
Revenues are attributed to countries on the basis of the customer’s location, irrespective of the origin of the
goods and services. The non-current assets are analysed by the geographical area in which the assets are
located. The non-current assets exclude any financial instruments and deferred tax assets.
73NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
4. Financial information by operating segments (Continued)
4F. Other material items and reconciliations
Expenditures for non-current assets of $3,183,000 (2018: $10,635,000) are recognised in respect of property,
plant and equipment. Segment information is not available for expenditures for non-current assets as the
information is not available and the cost to allocate to the segment would be excessive.
4G. Information about major customers
Group
2019 2018
$’000 $’000
Top 1 customer in more than one segment 9,881 11,639
Top 2 customers in more than one segment 15,077 20,566
Top 3 customers in more than one segment 20,091 25,226
5. Revenue
Revenue from contracts with customers
A. Revenue classified by type of good or service:
Group
2019 2018
$’000 $’000
Services 56,483 56,800
Sale of goods 28,144 29,238
Construction contracts – 1,869
Other revenue – 3,787
Total revenue 84,627 91,694
B. Revenue classified by duration of contract:
Group
2019 2018
$’000 $’000
Short-term contracts – less than 12 months 84,627 89,825
Long-term contracts – more than 12 months – 1,869
Total revenue 84,627 91,694
74 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
5. Revenue (Continued)
C. Revenue classified by timing of revenue recognition:
Group
2019 2018
$’000 $’000
Point in time 28,144 33,025
Over time 56,483 58,669
Total revenue 84,627 91,694
D. Other information on revenue:
Distinct goods or services created over time – For long-term service contracts and projects for
constructing, manufacturing or developing an asset include the following:
The group’s System Integration (“SI”) division offers integrated control and management systems for
newly built ships as well as ships that require upgrades or conversions. SI division designs, procures,
develops and manufactures actuators, valves and other components for assembly and integration into
valve remote control systems, tank gauging systems, anti-heeling systems, alarm monitoring and power
management systems used by customers in their vessels.
The group’s Precision Engineering (“PE”) division designs and builds tooling systems, and provides
turnkey production solutions to customers in the marine, oil and gas, aerospace, medical and electronic
manufacturing services industries.
The group’s Scaffolding Services (“SS”) division is an established leader in metal scaffold works servicing
the process, construction and marine industries, offering a full suite of scaffolding services including
design, erection, modification and dismantling, sales and rental.
The group’s Insulation Services (“IS”) division specialises in thermal and cryogenic insulation, thermal
spray aluminium and passive fireproofing services in the petrochemical, pharmaceutical, marine, oil and
gas industries.
The group’s Petrochemical and Engineering services division specialises in a wide range of services: pre
and post commissioning cleaning, heat exchanger cleaning, tank cleaning, process plant recovery work,
temporary intervention activities in process plants, on line cleaning process, turnaround work and support,
decontamination services, temporary equipment support services, product filtering services and support
in operation of utility plants. We serve the petrochemical, manufacturing, and infrastructure industries.
The group’s Cleanroom, Air and Water Solutions Engineering service provides tools hook up services, air
pollution control scrubbers and water treatment plants for the semiconductor, oil and gas, power plant
and municipality sectors.
75NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
5. Revenue (Continued)
Distinct goods or services in a point in time include the following:
The group’s Maintenance, Repair and Overhaul (“MRO”) and Trading division provides customers with after-
sales requests for maintenance, repairs and overhauls for the vessels. MRO division includes maintenance and
repair services, trading and supply of material, spare parts and components.
The group’s Others division relates to other revenue streams such as carbon allowances.
6. Other income and gains and (other losses)
Group
2019 2018
$’000 $’000
Allowance for impairment on trade receivables – loss (15) (22)
Foreign exchange adjustments (losses)/gains (630) 272
Gain on disposal of property, plant and equipment 117 481
Government grant 188 227
Interest income 479 367
Inventories written down (59) (98)
Other payables to ex-shareholders of
Ensure Engineering Pte Ltd written back 1,700 1,567
Other income 438 534
Net 2,218 3,328
Presented in profit or loss as:
Other income and gains 2,922 3,448
Other losses (704) (120)
Net 2,218 3,328
7. Administrative expenses
The major component includes the following:
Group
2019 2018
$’000 $’000
Employee benefits expense (Note 9) 8,857 9,222
76 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
8. Finance costs
Group
2019 2018
$’000 $’000
Interest expense 1,429 1,485
Interest on lease liabilities 108 –
Total finance costs 1,537 1,485
9. Employee benefits expense
Group
2019 2018
$’000 $’000
Short term employee benefits expense 27,647 28,645
Other benefits 3,909 4,669
Contributions to defined contribution plan 986 1,141
Total employee benefits expense 32,542 34,455
Allocation of employee benefits expense:
Administrative expenses 8,857 9,222
Cost of sales 23,445 25,101
Distribution costs 240 132
Total employee benefits expense 32,542 34,455
10. Income tax
10A. Components of tax expense recognised in profit or loss include:
Group
2019 2018
$’000 $’000
Current tax expense:
Current tax expense 877 1,212
Over adjustments in respect of prior periods (184) (296)
Subtotal 693 916
Deferred tax expense/(income):
Deferred tax expense/(income) 7 (85)
Subtotal 7 (85)
Total income tax expense 700 831
77NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
10. Income tax (Continued)
10A. Components of tax expense recognised in profit or loss include: (Continued)
The income tax in profit or loss varied from the amount of income tax amount determined by applying the
Singapore income tax rate of 17.0% (2018: 17.0%) to profit or loss before income tax as a result of the following
differences:
Group
2019 2018
$’000 $’000
Profit before tax 9,180 12,156
Income tax expense at the above rate 1,561 2,066
Expenses not deductible for tax purposes 113 22
Income not subject to tax (374) (518)
Over adjustments to tax in respect of prior periods (184) (296)
Effect of different tax rates in different countries 34 91
Previously unrecognised deferred tax assets recognised this year (79) –
Stepped income exemption and tax rebate (87) (188)
Merger and acquisition allowances (235) (317)
Others (49) (29)
Total income tax expense 700 831
There are no income tax consequences of dividends to owners of the company.
10B. Deferred tax expense/(income) recognised in profit or loss includes:
Group
2019 2018
$’000 $’000
Excess of tax over book depreciation on plant and equipment 136 –
Excess of book over tax depreciation on plant and equipment – (26)
Merger and acquisition allowances (314) –
Tax loss carryforwards 137 (52)
Others 48 (7)
Total deferred income tax expense/(income) recognised in profit or loss 7 (85)
78 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
10. Income tax (Continued)
10C. Deferred tax balance in the statements of financial position:
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
From deferred tax liabilities
recognised in profit or loss:
Excess of book value of plant and
equipment over tax values (3,260) (3,124) – –
Tax loss carryforwards – 137 – –
Merger and acquisition allowances
carryforwards 314 – – –
Others (74) (26) (12) –
Net balance (3,020) (3,013) (12) –
Presented in the statement of
financial position as follows:
Deferred tax asset 149 – – –
Deferred tax liabilities (3,169) (3,013) (12) –
Net balance (3,020) (3,013) (12) –
It is impracticable to estimate the amount expected to be settled or used within one year.
Temporary differences arising in connection with interests in subsidiaries are insignificant.
11. Earnings per share
The following table illustrates the numerators and denominators used to calculate basic and diluted earnings
per share of no par value:
Group
2019 2018
$’000 $’000
Numerators: earnings attributable to equity:
Continuing operations: attributable to equity holders 8,480 11,325
’000 ’000
Denominators: weighted average number of equity shares
Basic and diluted 392,145 392,967
The weighted average number of ordinary shares refers to shares in issue outstanding during the reporting
period.
The basic amount per share ratio is based on the weighted average number of ordinary shares outstanding
during each reporting year. It is after the neutralisation by the treasury shares.
Both basic and diluted earnings per share are the same as there are no diluted ordinary share equivalents
outstanding during the reporting years.
79NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
12. Dividends on equity shares
Group and Company
Rate per share
2019 2018 2019 2018
cents cents $’000 $’000
Final tax exempt (one-tier) dividend paid 0.353 0.873 1,386 3,431
Interim tax exempt (one-tier) dividend paid 0.429 0.779 1,681 3,062
Total dividends paid in the year 0.782 1.652 3,067 6,493
In respect of the current reporting year, the directors have proposed that a final dividend of 0.419 cents per
share with a total of $1,643,000 be paid to shareholders after the annual general meeting to be held on 27 April
2020. There are no income tax consequences on the reporting entity. This dividend is subject to approval
by shareholders at the next annual general meeting and has not been included as a liability in these financial
statements. The proposed dividend is payable in respect of all ordinary shares in issue at the end of the reporting
year and including the new qualifying shares issued up to the date the dividend becomes payable.
13. Property, plant and equipment
Leasehold
properties
Plant and
equipment Total
Group $’000 $’000 $’000
Cost:
At 1 January 2018 14,274 44,525 58,799
Foreign exchange adjustments – (375) (375)
Additions 6,568 4,067 10,635
Disposals – (1,231) (1,231)
At 31 December 2018 20,842 46,986 67,828
Arising from acquisition of subsidiaries – 2,893 2,893
Foreign exchange adjustments – (254) (254)
Additions 135 3,048 3,183
Disposals – (157) (157)
At 31 December 2019 20,977 52,516 73,493
80 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
13. Property, plant and equipment (Continued)
Leasehold
properties
Plant and
equipment Total
Group $’000 $’000 $’000
Accumulated depreciation:
At 1 January 2018 2,712 33,371 36,083
Foreign exchange adjustments – (217) (217)
Depreciation for the year 717 2,054 2,771
Disposals – (1,075) (1,075)
At 31 December 2018 3,429 34,133 37,562
Arising from acquisition of subsidiaries – 2,450 2,450
Foreign exchange adjustments – (179) (179)
Depreciation for the year 902 2,138 3,040
Disposals – (104) (104)
At 31 December 2019 4,331 38,438 42,769
Carrying value:
At 1 January 2018 11,562 11,154 22,716
At 31 December 2018 17,413 12,853 30,266
At 31 December 2019 16,646 14,078 30,724
Allocation of the depreciation expense:
Group
2019 2018
$’000 $’000
Cost of sales 1,482 1,463
Administrative expenses 1,558 1,308
Total 3,040 2,771
81NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
13. Property, plant and equipment (Continued)
Leasehold
properties
Plant and
equipment Total
Company $’000 $’000 $’000
Cost:
At 1 January 2018 – – –
Additions 6,277 291 6,568
At 31 December 2018 6,277 291 6,568
Additions 3 132 135
At 31 December 2019 6,280 423 6,703
Accumulated depreciation:
At 1 January 2018 – – –
Depreciation for the year 50 7 57
At 31 December 2018 50 7 57
Depreciation for the year 201 42 243
At 31 December 2019 251 49 300
Carrying value:
At 1 January 2018 – – –
At 31 December 2018 6,227 284 6,511
At 31 December 2019 6,029 374 6,403
Certain items are under finance lease agreements (see Note 14).
The leasehold properties are mortgaged or pledged as security for the bank facilities (see Note 26A).
14. Right-of-use assets and financial liabilities – lease liabilities
The leases are for motor vehicles, office space, production facilities and warehouses. The lease contracts are
usually for fixed periods of 5 to 30 years but may have extension options. Lease terms contain a wide range
of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may
not be used as security for borrowing purposes.
At the date of transition to the new standard on leases, management elected to measure the right-of-use assets
at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at
the date of transition (applied to leases previously classified as finance leases or operating leases). The lease
liability above does not include the short-term leases and leases of low-value underlying assets. Variable lease
payments which do not depend on an index or a rate or based on a percentage of revenue are not included
from the initial measurement of the lease liability and the right-of-use assets.
Lease payments to be made under reasonably certain extension options are also included in the measurement
of the liabilities.
82 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
14. Right-of-use assets and financial liabilities – lease liabilities (Continued)
The right-of-use assets and lease liabilities are in the statement of financial position. The movements are as
follows:
Group Company
Right-of-use
assets
Lease
liabilities
Right-of-use
assets
Lease
liabilities
$’000 $’000 $’000 $’000
Cost:
At 31 December 2018 – 398 – –
Lease liabilities recognised at 1 January 2019
on adoption of SFRS(I) 16 3,637 3,637 1,788 1,788
Total lease liability at date of application 3,637 4,035 1,788 1,788
Accretion of interest – 143 – 18
Lease payment – principal portion paid – (66) – (53)
Interest paid – (74) – –
At 31 December 2019 3,637 4,038 1,788 1,753
Accumulated depreciation:
At 31 December 2018 – – – –
Depreciation for the year 167 – 58 –
At 31 December 2019 167 – 58 –
Carrying value:
At 31 December 2018 – 398 – –
At 31 December 2019 3,470 4,038 1,730 1,753
The right-of-use assets are for the land use rights for the land in 1 Tuas Avenue and 2 Tuas Avenue (Singapore)
for office and factory space. They are amortised over the period of the lease term on the straight line method.
The land use rights expire in August 2035 and December 2049 respectively. They are not transferable.
Lease liabilities are presented in the statement of financial position as follows:
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
Lease liabilities, current 396 158 37 –
Lease liabilities, non-current 3,642 240 1,716 –
4,038 398 1,753 –
The new standard on leases has been applied using the modified retrospective transition approach. Therefore,
no comparative amounts for the year ended 31 December 2018 are presented.
83NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
14. Right-of-use assets and financial liabilities – lease liabilities (Continued)
On transition to the new standard on leases the weighted average incremental borrowing rate applied to lease
liabilities recognised was 3.0% per annum. The finance leases, right-of-use assets and lease liabilities before
the date of initial application are measured at the same amounts as under the new standard.
The obligations under finance leases are secured by a legal charge over the leased assets.
Reconciliation of lease commitments and lease liabilities at the date of initial application:
2019
$’000
Operating lease commitments as at 31 December 2018 7,851
Relief option for short-term leases (2,742)
Subtotal – Operating lease liabilities before discounting 5,109
Discounted using incremental borrowing rate (1,472)
Operating lease liabilities, net 3,637
Finance lease obligations recognised as at 31 December 2018 398
Total lease liabilities recognised at 1 January 2019 4,035
A summary of the maturity analysis of lease liabilities that shows the remaining contractual maturities is as follows:
Group
Minimum
payments
Finance
charges
Present
value
2019: $’000 $’000 $’000
Minimum lease payments payable:
Due within 1 year 513 (117) 396
Due within 2 to 5 years 1,433 (463) 970
More than 5 years 3,451 (779) 2,672
Total 5,397 (1,359) 4,038
Net book value of plant and
equipment under finance leases 787
Group
Minimum
payments
Finance
charges
Present
value
2018: $’000 $’000 $’000
Minimum lease payments payable:
Due within 1 year 175 (17) 158
Due within 2 to 5 years 266 (26) 240
Total 441 (43) 398
Net book value of plant and
equipment under finance leases 824
84 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
14. Right-of-use assets and financial liabilities – lease liabilities (Continued)
Company
Minimum
payments
Finance
charges
Present
value
2019: $’000 $’000 $’000
Minimum lease payments payable:
Due within 1 year 89 (52) 37
Due within 2 to 5 years 443 (242) 201
More than 5 years 2,121 (606) 1,515
Total 2,653 (900) 1,753
Total cash outflows for leases for the year ended 31 December 2019 are shown in the statement of cash flows.
There were no future cash outflows to which the lessee is potentially exposed that are not reflected in the
measurement of lease liabilities above.
Other disclosures on leases:
Apart from the disclosures made in other notes to the financial statements, amounts relating to leases include
the following:
2019
$’000
Expense relating to short-term leases included in other expenses 2,781
Total commitments on short-term leases at year end date 1,534
15. Goodwill
2019 2018
$’000 $’000
Cost:
At beginning and end of the year 29,552 29,552
Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of those cash-
generating units represents the group’s investment by each subsidiary as follows:
Group
2019 2018
$’000 $’000
Name of subsidiary:
Multiheight Scaffolding Pte Ltd 12,292 12,292
Austin Energy (Asia) Pte Ltd 10,159 10,159
Ensure Engineering Pte Ltd 7,101 7,101
Net book value at end of the year 29,552 29,552
85NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
15. Goodwill (Continued)
The goodwill was tested for impairment at the end of the reporting year. No impairment allowance was required
because the carrying amount of all cash-generating units was lower than their estimated recoverable amount.
The value in use was measured by management. The key assumptions for the value in use calculations are as
follows. The value in use is a recurring fair value measurement (Level 3). The quantitative information about the
value in use measurement using significant unobservable inputs for the cash generating unit are consistent with
those used for the measurement last performed and is analysed as follows:
2019 2018
Asset or CGU Valuation technique and Unobservable inputs
Discounted cash flow method:
1. Estimated discount rates using pre-tax rates that reflect
current market assessments at the risks specific to the CGUs.
Multiheight Scaffolding Pte Ltd 18% 18%
Austin Energy (Asia) Pte Ltd 18% 18%
Ensure Engineering Pte Ltd 18% 18%
2. Cash flow forecasts derived from the most recent financial budgets
and plans approved by management. 5 years 5 years
3. Growth rates based on industry growth forecasts and not exceeding
the average long-term growth rate for the relevant markets. 1% 1%
Actual outcomes could vary from these estimates. If the revised estimated revenue at the end of the reporting
year had been 10% less favourable than management’s estimates at the end of the reporting year, there would
not be a need to reduce the carrying amount of goodwill. If the revised estimated gross margin at the end of the
reporting year had been 10% less favourable than management’s estimates at the end of the reporting year, there
would not be a need to reduce the carrying amount of goodwill. If the revised estimated pre-tax discount rate
applied to the discounted cash flows had been 1 percent point less favourable than management’s estimates,
there would not be a need to reduce the carrying amount of goodwill.
86 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
16. Intangible asset
Order
backlog
Group $’000
Cost:
At 1 January 2019 –
Arising from acquisition of subsidiaries 720
At 31 December 2019 720
Accumulated amortisation:
At 1 January 2019 –
Amortisation for the year 55
At 31 December 2018 55
Carrying value:
At 1 January 2019 –
At 31 December 2019 665
The amortisation is charged to administrative expenses.
17. Investments in subsidiaries
Company
2019 2018
$’000 $’000
Movements during the year. At cost:
At beginning and end of the year 1,350 1,350
Total cost comprising:
Unquoted equity shares at cost 1,350 1,350
Net book value of subsidiaries 43,516 51,129
87NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
17. Investments in subsidiaries (Continued)
The listing of and information on the subsidiaries are given below.
#A. The following subsidiaries are wholly owned by the group:
Name of subsidiaries, country of incorporation,
place of operations and principal activities
(and independent auditor)
Cost in books of the group
2019 2018
$’000 $’000
Nordic Flow Control Pte. Ltd. (a) 1,350 1,350
Singapore
Integration, assembly, trading, importing and
exporting of hydraulic systems and marine components
Avitools (Suzhou) Co., Ltd (b) 3,500 3,500
The People’s Republic of China
Engineering works and manufacturing of aircraft components and
hydraulic actuators for the marine, oil and gas industry
(Suzhou Allpro Certified Public Accountants Co., Ltd.)
Austin Energy (Asia) Pte Ltd (a) 25,747 25,747
Singapore
Provision of construction, scaffolding, insulation,
painting and fireproofing services
Austin Energy Offshore Pte Ltd (a) 1,350 1,350
Singapore
Building construction specialist (insulation and fireproofing)
contractor in process plan construction
and general wholesale trade
Ensure Engineering Pte Ltd (a) 16,325 16,325
Singapore
Chemical and engineering activities for marine,
manufacturing refineries, utilities and petrochemical industries
Multiheight Scaffolding Pte Ltd (a) 28,945 28,945
Singapore
Scaffolding works for refinery, marine and construction industries
and sales and rental of tubular frames and aluminium scaffolds
88 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
17. Investments in subsidiaries (Continued)
Name of subsidiaries, country of incorporation,
place of operations and principal activities
(and independent auditor)
Cost in books of the group
2019 2018
$’000 $’000
Multiheight Marine Pte Ltd (a) 204 204
Singapore
Repairing ships, tankers and other ocean going vessels and
providing scaffolding works
Nordic Flow Control (Suzhou) Co., Ltd (b) 1,347 1,347
The People’s Republic of China
Integration, assembly, trading, importing and exporting of hydraulic
systems and marine components
(Suzhou Allpro Certified Public Accountants Co., Ltd.)
Envipure Pte. Ltd. (a) 14,800 –
Singapore
Providers of facilities engineering services, undertaking projects for air
pollution control systems, water and waste water treatment systems
(Acquired on 21 November 2019)
Envipure Sdn Bhd. (b) 2,781 –
Malaysia
Integration, assembly, trading, importing and exporting of hydraulic
systems and marine components
(Mazars LLP) 49% is held in trust by employees
(Acquired on 21 November 2019)
Pollution Control Pte Ltd (c) 143 –
Singapore
Dormant
(Acquired on 21 November 2019)
(a) Audited by RSM Chio Lim LLP in Singapore.
(b) Other independent auditors. Audited by firms of accountants other than member firms of RSM International
of which RSM Chio Lim LLP in Singapore is a member. Their names are indicated above.
(c) The subsidiary is dormant during the reporting year.
As is required by Rule 716 of the Listing Manual of The Singapore Exchange Securities Trading Limited, the
audit committee and the board of directors of the company have satisfied themselves that the appointment of
different auditor for certain of its overseas subsidiaries would not compromise the standard and effectiveness
of the audit of the group.
89NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
18. Assets held for sale and liabilities of a disposal group classified as held for sales
Two leasehold properties are held for sale following the decision of management in September 2017 to sell.
The sales are expected to be completed by 2020.
Group
2019 2018
$’000 $’000
Assets held for sale:
Leasehold properties at net book value 8,076 8,076
Less liabilities associated with assets classified as held for sale:
Loans and borrowings (Note 26A) (3,000) (8,403)
Net assets/(liabilities) held for sale 5,076 (327)
19. Inventories
Group
2019 2018
$’000 $’000
Raw material, consumables and supplies 6,548 6,633
Work in progress 3,682 1,005
Finished goods 1,815 2,457
12,045 10,095
Inventories are stated after allowance.
Movements in allowance:
At beginning of the year 1,272 1,262
Arising from acquisition of subsidiaries 447 –
Charged to profit or loss included in other losses 59 98
Reversed to profit or loss included in cost of sales (89) (77)
Foreign exchange adjustments (9) (11)
At end of the year 1,680 1,272
Raw materials, consumables and supplies used 22,678 20,467
There are no inventories pledged as security for liabilities.
90 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
20. Trade and other receivables
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
Trade receivables:
Outside parties 26,203 22,726 – –
Less allowance for impairment (3,339) (281) – –
Subsidiaries (Note 3) – – 20,175 12,102
Retention receivables 597 400 – –
Net trade receivables – subtotal 23,461 22,845 20,175 12,102
Other receivables:
Outside parties 150 170 149 162
Net other receivables – subtotal 150 170 149 162
Total trade and other receivables 23,611 23,015 20,324 12,264
Movements in above allowance
on trade receivables:
At beginning of the year 281 259 – –
Arising from acquisition of subsidiaries 3,061 – – –
Charge for trade receivables
to profit or loss included in other losses 15 22 – –
Charge for trade receivables to profit or loss
included in administrative expenses 16 – – –
Used (34) – – –
At end of the year 3,339 281 – –
The trade receivables are subject to the expected credit loss model under the financial reporting standard on
financial instruments. The methodology applied for impairment loss is the simplified approach to measuring
expected credit losses (ECL) which uses a lifetime expected loss allowance for all trade receivables. The expected
lifetime losses are recognised from initial recognition of these assets. These assets are grouped based on shared
credit risk characteristics and the days past due for measuring the expected credit losses. The allowance matrix
is based on its historical observed default rates (over a period of 36 months) over the expected life of the trade
receivables and is adjusted for forward-looking estimates. At every reporting date the historical observed default
rates are updated and changes in the forward-looking estimates are analysed.
91NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
20. Trade and other receivables (Continued)
Gross amount Loss allowance
2019 2018 2019 2018
$’000 $’000 $’000 $’000
Group
Trade receivables:
Current 16,523 12,469 – –
1 to 30 days 3,788 4,928 – –
31 to 60 days 1,987 1,601 – –
61 to 90 days 834 652 – –
Over 90 days 3,668 3,476 3,339 281
Total 26,800 23,126 3,339 281
Company
Trade receivables:
Current 1,408 419 – –
31 to 60 days 11,369 – – –
61 to 90 days – 241 – –
Over 90 days 7,398 11,442 – –
Total 20,175 12,102 – –
The loss allowance disclosed above is based on individual accounts totalling $3,339,000 (2018: $281,000) that
are determined to be impaired at the end of the reporting year.
There are no collateral held as security and other credit enhancements for the trade receivables.
As part of the process of setting customer credit limits, different credit terms are used. The average credit
period generally granted to trade receivable customers is about 30 to 90 days (2018: 30 to 90 days). But some
customers take a longer period to settle the amounts.
Concentration of trade receivable customers as at the end of reporting year:
Group
2019 2018
$’000 $’000
Top 1 customer 2,857 2,047
Top 2 customers 4,744 3,935
Top 3 customers 5,497 5,661
The other receivables at amortised cost shown above are subject to the expected credit loss model under the
financial reporting standard on financial instruments.
92 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
20. Trade and other receivables (Continued)
The other receivables at amortised cost and which can be graded as low risk individually are considered to
have low credit risk. At the end of the first reporting period a loss allowance is recognised at an amount equal
to 12 month expected credit losses because there has not been a significant increase in credit risk since initial
recognition. No loss allowance is necessary.
Other receivables are normally with no fixed terms and therefore there is no maturity.
At each subsequent reporting date, an evaluation is made whether there is a significant change in credit risk by
comparing the debtor’s credit risk at initial recognition (based on the original, unmodified cash flows) with the
credit risk at the reporting date (based on the modified cash flows). Adjustment to the loss allowance is made
for any increase or decrease in credit risk.
21. Other assets
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
Unbilled revenue 8,318 9,948 654 576
Prepayments 641 765 4 65
Deposits to secure services 1,386 911 7 –
10,345 11,624 665 641
22. Cash and cash equivalents
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
Not restricted in use 43,200 39,232 23,819 20,092
The interest earning balances are not significant.
22A. Non-cash transactions:
In 2018, there were acquisitions of certain assets under property, plant and equipment with a total cost of
$246,000 acquired by means of finance leases.
93NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
22. Cash and cash equivalents (Continued)
22B. Reconciliation of liabilities arising from financing activities:
2018
Cash
flows
Non-cash
changes 2019
$’000 $’000 $’000 $’000
Finance lease liabilities 398 (66) 3,706(a) 4,038
2017
Cash
flows
Non-cash
changes 2018
$’000 $’000 $’000 $’000
Finance lease liabilities 557 (405) 246(b) 398
(a) Arising from adoption of SFRS(I) 16
(b) Acquisition (Note 22A)
23. Share capital
Number of
shares
issued
Share
capital
Treasury
shares Total
Group and Company ’000 $’000 $’000 $’000
Ordinary shares of no par value:
Balance at beginning of the year
1 January 2018 393,112 22,439 (1,303) 21,136
Treasury shares purchased(a) (593) – (264) (264)
Balance at end of the year
31 December 2018 392,519 22,439 (1,567) 20,872
Treasury shares purchased(a) (615) – (169) (169)
Balance at end of the year
31 December 2019 391,904 22,439 (1,736) 20,703
The ordinary shares of no par value are fully paid, carry one vote each and have no right to fixed income. The
company is not subject to any externally imposed capital requirements.
(a) Pursuant to the share purchase mandate approved at the extraordinary general meeting on 29 April 2015 and renewed at the annual
general meeting on 29 April 2019, during the reporting year the company acquired 615,600 ordinary shares (2018: 593,800 ordinary
shares) on the Singapore Stock Exchange and held as treasury shares. The total is 8,096,500 (2018: 7,480,900) treasury shares.
94 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
23. Share capital (Continued)
The objectives when managing capital are: to safeguard the reporting entity’s ability to continue as a going
concern, so that it can continue to provide returns for owners and benefits for other stakeholders, and to provide
an adequate return to owners by pricing the sales commensurately with the level of risk. The management sets
the amount of capital to meet its requirements and the risk taken. There were no changes in the approach
to capital management during the reporting year. The management manages the capital structure and makes
adjustments to it where necessary or possible in the light of changes in conditions and the risk characteristics
of the underlying assets. In order to maintain or adjust the capital structure, the management may adjust the
amount of dividends paid to owners, return capital to owners, issue new shares, or sell assets to reduce debt.
Adjusted capital comprises all components of equity (that is, share capital and reserves).
In order to maintain its listing on the Singapore Stock Exchange it has to have share capital with a free float of
at least 10% of the shares. The company met the capital requirement on its initial listing and the rules limiting
treasury share purchases mean it will continue to satisfy that requirement, as it did throughout the reporting
year. Management receives a report from the share registrars frequently on substantial share interests showing
the non-free float to ensure continuing compliance with the 10% limit throughout the reporting year.
The management does not set a target level of gearing but uses capital opportunistically to support its business
and to add value for shareholders. The key discipline adopted is to widen the margin between the return on
capital employed and the cost of that capital.
The management monitors the capital on the basis of the debt-to-adjusted capital ratio. This ratio is calculated
as net debt/adjusted capital (as shown below). Net debt is calculated as total borrowings less cash and cash
equivalents.
Group
2019 2018
$’000 $’000
Net debt:
All current and non-current borrowings excluding lease liabilities 44,069 48,808
Less cash and cash equivalents (43,200) (39,232)
Net debt 869 9,576
Adjusted capital (less goodwill and intangible asset) 55,681 51,440
Debt-to-adjusted capital ratio 1.6% 18.6%
The favourable change as shown by the decrease in the debt-to-adjusted capital ratio for the reporting year
resulted primarily from the decrease in borrowings and increase in cash and cash equivalent.
95NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
24. Other reserves
Group
2019 2018
$’000 $’000
Foreign currency translation reserve (Note 24A) (248) 90
Statutory reserve (Note 24B) 235 235
Total at the end of the year (13) 325
All the reserves classified on the face of the statements of financial position as retained earnings represents
past accumulated earnings and are distributable as cash dividends. The other reserves are not available for
cash dividends unless realised.
24A. Foreign currency translation reserve
Group
2019 2018
$’000 $’000
At beginning of the year 90 280
Exchange differences on translating foreign operations (338) (190)
At end of the year (248) 90
24B. Statutory reserve
Group
2019 2018
$’000 $’000
At beginning and end of the year 235 235
The subsidiaries in China is required by local regulation to appropriate 10% of the profits each year to a non-
distributable statutory reserve. Contribution to this reserve is no longer mandatory when the reserve reaches
50% of the registered share capital. The use of the funds in the non-distributable statutory reserve is subject
to approval by the relevant authorities in China.
96 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
25. Provisions
Group
2019 2018
$’000 $’000
Non-current:
Warranties 565 –
Total non-current portion 565 –
Current:
Warranties 1,711 –
Total current portion 1,711 –
Total non-current and current 2,276 –
Movements in above provisions:
At beginning of the year – –
Arising from acquisition of subsidiaries 868 –
Charge to profit or loss included in cost of sales 1,434 –
Reversed to profit or loss included in cost of sales (26) –
At end of the year 2,276 –
Certain products are covered by product warranty plans of varying periods. If the customer has the option
to purchase a warranty separately or is negotiated separately, the warranty is accounted as a performance
obligation and a portion of the transaction price is allocated to that performance obligation and recognised as
revenue over the period the warranty services are provided. The warranty obligations are affected by actual
product failure rates and by material usage and service delivery costs incurred in correcting a product failure.
26. Loans and borrowings
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
Non-current:
Financial instruments with floating
interest rates:
Bank loans (secured) (Note 26A) 3,575 5,575 – –
Total non-current portion 3,575 5,575 – –
Current:
Financial instruments with floating
interest rates:
Bank loans (secured) (Note 26A) 18,800 18,073 8,800 9,600
Bank loans (Note 26B) 15,312 10,200 – –
Invoice financing and trust receipts
(Note 26B) 3,382 6,557 – –
Total current portion 37,494 34,830 8,800 9,600
Total non-current and current 41,069 40,405 8,800 9,600
97NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
26. Loans and borrowings (Continued)
The non-current portion is repayable as follows:
Group
2019 2018
$’000 $’000
Due within 2 to 5 years 3,575 5,575
The range of floating rate interest rates paid was as follows:
Group Company
2019 2018 2019 2018
Bank loans, invoice financing
and trust receipts 2.6% to 3.4% 2.5% to 3.2% 2.6% 2.1% to 2.5%
26A. Bank loans (secured)
The bank agreements for certain of the bank loans and other credit facilities provide among other matters for
the following:
1. Corporate guarantee from the company.
2. Legal mortgage over the leasehold properties (Notes 13 and 18).
3. Need to comply with certain financial covenants.
4. The bank loans comprise of:
a. Loan repayable in 1 instalment of $312,500 and 8 quarterly instalments of $937,500 from
September 2017. This loan was fully repaid in June 2019.
b. Short term borrowings with an average maturity period of 1 to 3 months and are settled at the
end of maturity period.
c. Loan repayable in 16 semi-annual instalments of $1,000,000 from June 2017.
d. Loan repayable in 30 quarterly instalments of $200,000 from June 2018. Although the loan is for
a period of 7.5 years from June 2018, it has been classified as “current” because the entity does
not have an unconditional right to defer settlement of the liability for at least twelve months after
the end of the reporting year.
During the reporting year, two leasehold properties under legal mortgage were classified as assets held for
sale. The corresponding bank loans are classified as liabilities of a disposal group classified as held for sale
accordingly (Note 18).
98 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
26. Loans and borrowings (Continued)
26B. Bank loans, invoice financing and trust receipts
The bank agreements for certain of the bank loans and other credit facilities provide among other matters for
the following:
1. Corporate guarantee from the company.
2. Need to comply with certain financial covenants.
3. Short term borrowings (invoice financing, trust receipts and money market loans) with an average maturity
period of 1 to 3 months and are settled at the end of maturity period.
27. Trade and other payables
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
Trade payables:
Outside parties and accrued liabilities 17,360 12,861 1,105 1,322
Trade payable – subtotal 17,360 12,861 1,105 1,322
Other payables:
Other payables – 85 – –
Other payables – acquisition of subsidiary(a) 2,251 4,536 – –
Other payable – subtotal 2,251 4,621 – –
Total trade and other payables 19,611 17,482 1,105 1,322
Presented as:
Trade and other payables, current 17,667 13,488 1,105 1,322
Other payables, non-current 1,944 3,994 – –
19,611 17,482 1,105 1,322
(a) This is for the contingent liability payable to the vendors for the acquisition of Ensure Engineering Pte Ltd in 2017.
28. Other non-financial liabilities
Group
2019 2018
$’000 $’000
Deferred revenue 787 151
Total non-financial liabilities 787 151
99NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
29. Acquisition of subsidiaries
On 21 November 2019 the group acquired 100% of the share capital in Envipure Pte. Ltd. (incorporated in
Singapore) and its subsidiaries (“Envipure Group”) and from that date, the group gained control. Envipure Group
became subsidiaries (also see Note 17 for the principal activities). The transaction was accounted for by the
acquisition method of accounting.
The consideration transferred is as follows:
2019
$’000
Consideration transferred:
Cash paid 14,800
The expenses of acquisition (net of government grant) of $65,000 were included in profit or loss under
administrative expenses.
The fair values of identifiable assets acquired and liabilities assumed shown below for Envipure Group are
provisional as the hindsight period (of not more than twelve months) allowed by the financial reporting standard
on business combinations has not yet expired. Management has since finalised the purchase price allocation
exercise and there was no change to the provisional fair values shown below.
Pre-acquisition
book value
under SFRS
At
fair value
$’000 $’000
2019: Envipure Group
Intangible assets – 720
Property, plant and equipment 443 443
Inventories 1,769 1,769
Trade and other receivables 7,672 7,672
Other assets 3,748 3,748
Cash and cash equivalents 14,883 14,883
Trade and other payables (11,919) (11,919)
Provisions (868) (868)
Other non-financial liabilities (499) (499)
Income tax payable (1,149) (1,149)
Net assets 14,080 14,800
100 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
29. Acquisition of subsidiaries (Continued)
The net cash inflow on acquisition was as follows:
2019
$’000
Purchase consideration 14,800
Less cash taken over (14,883)
Net cash inflow for statement of cash flows purposes at end of the year (83)
The contributions from the acquired subsidiaries for the period between the date of acquisition and the end of
the reporting year were as follows:
From date of
acquisition in
For the
reporting year
2019 2019
$’000 $’000
Revenue 5,743 38,015
Profit before income tax 1,143 2,650
30. Financial instruments: information on financial risks
30A. Categories of financial assets and liabilities
The following table categorises the carrying amount of financial assets and liabilities recorded at the end of the
reporting year:
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
Financial assets:
Financial assets at amortised cost 66,811 62,247 44,143 32,356
At end of the year 66,811 62,247 44,143 32,356
Financial liabilities:
Financial liabilities at amortised cost 67,718 66,688 11,658 10,922
At end of the year 67,718 66,688 11,658 10,922
Further quantitative disclosures are included throughout these financial statements.
101NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
30. Financial instruments: information on financial risks (Continued)
30B. Financial risk management
The main purpose for holding or issuing financial instruments is to raise and manage the finances for the
entity’s operating, investing and financing activities. There are exposures to the financial risks on the financial
instruments such as credit risk, liquidity risk and market risk comprising interest rate, currency risk and price
risk exposures. Management has certain practices for the management of financial risks. However these are
not formally documented in written form. The guidelines include the following:
1. Minimise interest rate, currency, credit and market risks for all kinds of transactions.
2. Maximise the use of “natural hedge”: favouring as much as possible the natural off-setting of sales and
costs and payables and receivables denominated in the same currency and therefore put in place hedging
strategies only for the excess balance (if necessary). The same strategy is pursued with regard to interest
rate risk.
3. All financial risk management activities are carried out and monitored by senior staff.
4. All financial risk management activities are carried out following acceptable market practices.
There have been no changes to the exposures to risk; the objectives, policies and processes for managing the
risk and the methods used to measure the risk.
30C. Fair values of financial instruments
The analyses of financial instruments that are measured subsequent to initial recognition at fair value, grouped
into Levels 1 to 3 are disclosed in the relevant notes to the financial statements. These include the significant
financial instruments stated at amortised cost and at fair value in the statement of financial position. The
carrying values of current financial instruments approximate their fair values due to the short-term maturity of
these instruments and the disclosures of fair value are not made when the carrying amount of current financial
instruments is a reasonable approximation of the fair value.
102 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
30. Financial instruments: information on financial risks (Continued)
30D. Credit risk on financial assets
Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties to
discharge their obligations in full or in a timely manner. These arise principally from cash balances with banks,
cash equivalents and receivables. The maximum exposure to credit risk is the total of the fair value of the
financial assets at the end of the reporting year. Credit risk on cash balances with banks and any other financial
instruments is limited because the counter-parties are entities with acceptable credit ratings. For expected
credit losses (ECL) on financial assets, the three-stage approach in the financial reporting standard on financial
instruments is used to measure the impairment allowance. Under this approach the financial assets move
through the three stages as their credit quality changes. However, a simplified approach is permitted by the
financial reporting standards on financial instruments for financial assets that do not have a significant financing
component, such as trade receivables. On initial recognition, a day-1 loss is recorded equal to the 12 month ECL
(or lifetime ECL for trade receivables), unless the assets are considered credit impaired. For credit risk on trade
receivables an ongoing credit evaluation is performed on the financial condition of the debtors and an impairment
loss is recognised in profit or loss. Reviews and assessments of credit exposures in excess of designated limits
are made. Renewals and reviews of credits limits are subject to the same review process.
Note 22 discloses the maturity of the cash and cash equivalents balances. Cash and cash equivalents are
also subject to the impairment requirements of the standard on financial instruments. There was no identified
impairment loss.
30E. Liquidity risk – financial liabilities maturity analysis
The following table analyses the non-derivative financial liabilities by remaining contractual maturity (contractual
undiscounted cash flows):
Group
Less than
1 year
2 to 5
years
More than
5 years Total
Non-derivative financial liabilities: $’000 $’000 $’000 $’000
2019:
Gross loans and borrowings 40,830 3,872 – 44,702
Gross lease liabilities 513 1,433 3,451 5,397
Trade and other payables 17,667 1,944 – 19,611
At end of the year 59,010 7,249 3,451 69,710
Non-derivative financial liabilities:
2018:
Gross loans and borrowings 43,699 5,875 – 49,574
Gross lease liabilities 175 266 – 441
Trade and other payables 13,488 3,994 – 17,482
At end of the year 57,362 10,135 – 67,497
103NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
30. Financial instruments: information on financial risks (Continued)
30E. Liquidity risk – financial liabilities maturity analysis (Continued)
Company
Less than
1 year
2 to 5
years
More than
5 years Total
Non-derivative financial liabilities: $’000 $’000 $’000 $’000
2019:
Gross loans and borrowings 8,822 – – 8,822
Gross lease liabilities 89 443 2,121 2,653
Trade and other payables 1,105 – – 1,105
Financial guarantee contracts 32,008 3,872 – 35,880
At end of the year 42,024 4,315 2,121 48,460
Non-derivative financial liabilities:
2018:
Gross loans and borrowings 9,621 – – 9,621
Trade and other payables 1,322 – – 1,322
Financial guarantee contracts 34,078 5,875 – 39,953
At end of the year 45,021 5,875 – 50,896
The undiscounted amounts on the borrowings with fixed and floating interest rates are determined by reference
to the conditions existing at the reporting date.
The liquidity risk refers to the difficulty in meeting obligations associated with financial liabilities that are settled
by delivering cash or another financial asset. It is expected that all the liabilities will be settled at their contractual
maturity. The average credit period taken to settle trade payables is about 30 to 60 days (2018: 30 to 60 days).
The classification of the financial assets is shown in the statement of financial position as they may be available
to meet liquidity needs and no further analysis is deemed necessary.
Financial guarantee contracts – For issued financial guarantee contracts the maximum amount of the guarantee
is allocated to the earliest period in which the guarantee could be called. At the end of the reporting year no
claims on the financial guarantees are expected to be payable. The above table shows the maturity analysis of
the contingent liabilities from financial guarantees.
The above amounts disclosed in the maturity analysis are the contractual undiscounted cash flows and such
undiscounted cash flows differ from the amount included in the statement of financial position. When the
counterparty has a choice of when an amount is paid, the liability is included on the basis of the earliest date
on which it can be required to pay.
104 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
30. Financial instruments: information on financial risks (Continued)
30E. Liquidity risk – financial liabilities maturity analysis (Continued)
Bank facilities:
Group
2019 2018
$’000 $’000
Undrawn borrowings and trade lines 52,179 39,352
Undrawn foreign exchange lines and interest rate swap 44,900 44,900
Total undrawn borrowing facilities 97,079 84,252
The undrawn borrowing facilities are available for operating activities and to settle other commitments. Borrowing
facilities are maintained to ensure funds are available for the operations. A schedule showing the maturity of
financial liabilities and unused bank facilities is provided regularly to management to assist in monitoring the
liquidity risk.
30F. Interest rate risk
Interest rate risk arises on interest-bearing financial instruments recognised in the statement of financial position
and on some financial instruments not recognised in the statement of financial position. The following table
analyses the breakdown of the significant financial instruments by type of interest rate:
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
Financial liabilities with interest:
Fixed rates 4,038 398 1,753 –
Floating rates 44,069 48,808 8,800 9,600
Total at end of the year 48,107 49,206 10,553 9,600
The floating rate debt asset instruments are with interest rates that are re-set at regular intervals. The interest
rates are disclosed in the respective notes.
Sensitivity analysis: The effect on pre-tax profit is not significant.
105NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
30. Financial instruments: information on financial risks (Continued)
30G. Foreign currency risk
Foreign exchange risk arises on financial instruments that are denominated in a foreign currency, ie in a currency
other than the functional currency in which they are measured. For the purpose of this financial reporting
standard on financial instruments: disclosures, currency risk does not arise from financial instruments that are
non-monetary items or from financial instruments denominated in the functional currency.
Analysis of amounts denominated in non-functional currency:
Group
United
States
Dollar Euro Total
2019: $’000 $’000 $’000
Financial assets:
Cash 29,409 73 29,482
Loans and receivables 6,585 – 6,585
Total financial assets 35,994 73 36,067
Financial liabilities:
Trade and other payables (262) (110) (372)
Total financial liabilities (262) (110) (372)
Net financial assets (liabilities) at end of the year 35,732 (37) 35,695
2018:
Financial assets:
Cash 23,611 7 23,618
Loans and receivables 4,380 – 4,380
Total financial assets 27,991 7 27,998
Financial liabilities:
Borrowings (81) (322) (403)
Trade and other payables (431) (179) (610)
Total financial liabilities (512) (501) (1,013)
Net financial assets (liabilities) at end of the year 27,479 (494) 26,985
106 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
30. Financial instruments: information on financial risks (Continued)
30G. Foreign currency risk (Continued)
Company
United
States
Dollar Total
2019: $’000 $’000
Financial assets:
Cash 23,047 23,047
Total financial assets at end of the year 23,047 23,047
2018:
Financial assets:
Cash 16,860 16,860
Total financial assets at end of the year 16,860 16,860
There is exposure to foreign currency risk as part of normal business.
Sensitivity analysis:
Group Company
2019 2018 2019 2018
$’000 $’000 $’000 $’000
A hypothetical 10% strengthening in the exchange
rate of the functional currency $ against the US$
with all other variables held constant would have
an adverse effect on pre-tax profit of (3,248) (2,498) (2,095) (1,533)
A hypothetical 10% strengthening in the exchange
rate of the functional currency $ against the Euro
with all other variables held constant would have a
favourable effect on pre-tax profit of 3 45 – –
The above table shows sensitivity to the hypothetical percentage variations in the functional currency against the
relevant non-functional foreign currencies. The sensitivity rate used is the reasonably possible change in foreign
exchange rates. For similar rate weakening of the functional currency against the relevant foreign currencies
above, there would be comparable impacts in the opposite direction.
In management’s opinion, the above sensitivity analysis is unrepresentative of the foreign currency risks as the
historical exposure does not reflect the exposure in future.
The hypothetical changes in exchange rates are not based on observable market data (unobservable inputs).
The sensitivity analysis is disclosed for each non-functional currency to which the entity has significant exposure
at end of the reporting year. The analysis above has been carried out on the basis that there are no hedged
transactions.
107NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
31. Items in profit or loss
In addition to the profit and loss line items disclosed elsewhere in the notes to the financial statements, this
item includes the following expenses:
Group
2019 2018
$’000 $’000
Audit fees to the independent auditor of the company 194 172
Audit fees to the other independent auditors 46 46
Other fees to the independent auditor of the company 88 39
32. Events after the end of the reporting year
There are current uncertainties in the economy related to the COVID-19 outbreak that emerged since early
2020. These uncertainties has impacted the Group’s operations and it will have an impact on the group’s
productivity and financial performance for the next financial year, the extent of which will depend on how long
the outbreak lasts.
33. Changes and adoption of financial reporting standards
For the current reporting year new or revised financial reporting standards were issued by the Singapore
Accounting Standards Council. Those applicable to the reporting entity are listed below. Those applicable new
or revised standards did not require any significant modification of the measurement methods or the presentation
in the financial statements except for SFRS (I) 16 Leases discussed below.
SFRS (I) No. Title
SFRS (I) 16 Leases (and Leases – Illustrative Examples & Amendments to
Guidance on Other Standards)
SFRS (I) INT23 Uncertainty over Income Tax Treatments
SFRS (I) 1-12 Improvements (2017) – Amendments: Income Taxes
SFRS (I) 1-23 Improvements (2017) – Amendments: Borrowing Costs
SFRS (I) 3 Improvements (2017) – Amendments: Business Combinations
Leases:
The financial reporting standard on leases is effective for annual periods beginning on or after 1 January 2019
and it supersedes the previous reporting standard and the related interpretations on leases. For the lessee
almost all leases are brought onto the statements of financial position under a single model (except leases
of less than 12 months and leases of low-value assets), eliminating the distinction between operating and
finance leases. Thus, the entity has recognised a right-of-use asset and a corresponding liability in respect of
all these leases (unless they qualify for low value or short-term leases) which might have a material impact on
the amounts recognised in the financial statements. The amount by which each financial statement line item is
impacted (debits/(credits)) in the current reporting year 2019 by the application of the new standard on leases
are disclosed in Note 14. The reporting entity elected to apply the modified retrospective approach for this
standard new standard on leases. Under the modified retrospective approach the comparative Information is
not restated and therefore there is no presentation of a third column for the statement of financial position. Any
cumulative effect of initially applying this standard is recognised as an adjustment to the opening balance of
retained earnings at the date of initial application.
108 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
34. New or amended standards in issue but not yet effective
For the future reporting years certain new or revised financial reporting standards were issued by the Singapore
Accounting Standards Council and these will only be effective for future reporting years. Those applicable to
the reporting entity for future reporting years are listed below. The transfer to the applicable new or revised
standards from the effective dates is not expected to result in any significant modification of the measurement
methods or the presentation in the financial statements for the following year from the known or reasonably
estimable information relevant to assessing the possible impact that application of the new or revised standards
may have on the entity’s financial statements in the period of initial application.
SFRS (I) No. Title
Effective date for
periods beginning
on or after
SFRS (I) 3 Definition of a Business – Amendments 1 January 2020
SFRS (I) 1-1 and 1-8 Definition of Material – Amendments to 1 January 2020
The Conceptual Framework for Financial Reporting
109NORDIC GROUP LIMITED / ANNUAL REPORT 2019
31 DECEMBER 2019
NOTES TO THE FINANCIAL STATEMENTS
Number of Issued Shares 400,000,000
Number of Issued Shares (excluding treasury shares and subsidiary holdings) 391,155,300
Number of Subsidiary holdings Nil
Class of Shares Ordinary Shares
Voting Rights (excluding Treasury Shares) 1 vote per share
As at 24 March 2020, the total number of ordinary shares held in treasury is 8,844,700(a). The percentage of such
holding against the total number of issued ordinary shares (excluding treasury shares and subsidiary holdings) is 2.26%.
DISTRIBUTION OF SHAREHOLDERS BY SIZE OF SHAREHOLDINGS AS AT 24 MARCH 2020
SIZE OF SHAREHOLDINGS
NO. OF
SHAREHOLDERS % NO. OF SHARES %(b)
1 – 99 0 0.00 0 0.00
100 – 1,000 90 8.79 62,875 0.02
1,001 – 10,000 396 38.67 2,425,600 0.62
10,001 – 1,000,000 522 50.98 37,588,900 9.61
1,000,001 and above 16 1.56 351,077,925 89.75
Total 1,024 100.00 391,155,300 100.00
SHAREHOLDING HELD IN HANDS OF PUBLIC
As at 24 March 2020, approximately 22.9% of the issued ordinary shares of the Company is held by the public and
therefore, Rule 723 of the Listing Manual is complied with.
TWENTY LARGEST SHAREHOLDERS AS AT 24 MARCH 2020
Name No. of Shares %(b)
CHANG YEH HONG 212,706,725 54.38
DBS NOMINEES PTE LTD 44,455,400 11.37
LIN CHOON HIN 44,050,000 11.26
OCBC SECURITIES PRIVATE LTD 12,103,400 3.09
CITIBANK NOMINEES SINGAPORE PTE LTD 10,640,800 2.72
CHOU CHEE FATT 4,877,000 1.25
PHILLIP SECURITIES PTE LTD 4,040,900 1.03
CHANG HUI MIN MARISSA 3,157,400 0.81
CHANG YEH FUNG 2,833,700 0.72
QUEK HUILING JOANNE 2,437,800 0.62
MAYBANK KIM ENG SECURITIES PTE. LTD. 1,947,000 0.50
CHIA MENG RU 1,871,600 0.48
TAN HEE SENG 1,603,100 0.41
UNITED OVERSEAS BANK NOMINEES PTE LTD 1,514,000 0.39
OCBC NOMINEES SINGAPORE PTE LTD 1,459,200 0.37
RAFFLES NOMINEES (PTE) LIMITED 1,379,900 0.35
TAN KHOON SENG 1,000,000 0.26
LEE HENG SWEE 903,000 0.23
TAN KOK CHING 800,000 0.20
WANG LAI SUAN 800,000 0.20
TOTAL: 354,580,925 90.64
(a) 542,400 treasury shares purchased on 18 March 2020, 19 March 2020, 23 March 2020 and 27 March 2020 are not reflected as treasury shares
due to timing in settlement date.
(b) Percentage is calculated based on 391,155,300 shares (excluding shares held as treasury shares and subsidiary holdings) as at 24 March 2020.
110 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
AS AT 24 MARCH 2020
SHAREHOLDINGS STATISTICS
SUBSTANTIAL SHAREHOLDERS AS AT 24 MARCH 2020
as recorded in the Register of Substantial Shareholders
Number of Ordinary Shares
Name of Substantial Shareholder Direct Interest % Deemed Interest %
Chang Yeh Hong(1) 218,017,325 55.74 – –
Lin Choon Hin 44,050,000 11.26 – –
Teo Ling Ling(2) 32,319,500 8.26 – –
(1) 5,310,600 shares are held under DBS Nominees Pte Ltd and they are treated as direct interest
(2) 32,084,500 shares are held under DBS Nominees Pte Ltd and they are treated as direct interest
111NORDIC GROUP LIMITED / ANNUAL REPORT 2019
AS AT 24 MARCH 2020
SHAREHOLDINGS STATISTICS
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Nordic Group Limited (the “Company”) will be held
at 2 Tuas Ave 10 Singapore 639126 on Monday, 27 April 2020 at 10:00 am to transact the following business:
AS ORDINARY BUSINESS
1. To receive and consider the Directors’ Statement and Audited Financial Statements of the
Company for the financial year ended 31 December 2019 together with the Auditor’s Report
thereon.
Resolution 1
2. To declare a final tax exempt (one-tier) dividend of 0.419 Singapore cent per ordinary share for
the financial year ended 31 December 2019.
Resolution 2
3. To re-elect Mr Chang Yeh Hong who is retiring pursuant to Regulation 106 of the Constitution
of the Company, as a Director of the Company.
Resolution 3
4. To note the retirement of Ms Ong Hua as a Director of the Company, who is retiring pursuant to
Regulation 106 of the Constitution of the Company and has decided not to seek re-election.
[See Explanatory Note (i)]
5. To re-elect Mr Lee Kok Keng Andrew who is retiring pursuant to Regulation 116 of the
Constitution of the Company, as a Director of the Company.
Resolution 4
6. To approve the Directors’ fees of S$137,000 for the financial year ending 31 December 2020,
payable half-yearly in arrears.
Resolution 5
7. To approve additional Directors’ fees of S$3,000 for the financial year ended 31 December 2019. Resolution 6
8. To approve a one-off Director’s fee of S$15,000 payable to Ms Ong Hua for the financial year
ended 31 December 2019.
Resolution 7
9. To re-appoint Messrs RSM Chio Lim LLP as Auditor of the Company and to authorise the
Directors to fix their remuneration.
Resolution 8
112 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
NORDIC GROUP LIMITED (INCORPORATED IN SINGAPORE) REGISTRATION NO. 201007399N
NOTICE OF ANNUAL GENERAL MEETING
AS SPECIAL BUSINESS
To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions, with
or without amendments:
10. Authority to allot and issue shares
That pursuant to Section 161 of the Companies Act, Chapter 50 and Rule 806 of the Listing
Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), the Directors of the
Company be authorised and empowered to:
Resolution 9
(a) (i) allot and issue shares in the Company (“shares”) whether by way of rights, bonus or
otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or
would require shares to be issued, including but not limited to the creation and issue
of (as well as adjustments to) options, warrants, debentures or other instruments
convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such
persons as the Directors of the Company may in their absolute Discretion deem fit; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in
force) issue shares in pursuance of any Instruments made or granted by the Directors of
the Company while this Resolution was in force,
provided that:
(1) the aggregate number of shares (including shares to be issued in pursuance of the
Instruments, made or granted pursuant to this Resolution) to be issued pursuant
to this Resolution shall not exceed fifty per centum (50%) of the total number of
issued shares (excluding treasury shares and subsidiary holdings) in the capital of
the Company (as calculated in accordance with sub-paragraph (2) below), of which
the aggregate number of shares to be issued other than on a pro rata basis to
shareholders of the Company shall not exceed twenty per centum (20%) of the total
number of issued shares (excluding treasury shares and subsidiary holdings) in the
capital of the Company (as calculated in accordance with sub-paragraph (2) below);
113NORDIC GROUP LIMITED / ANNUAL REPORT 2019
NORDIC GROUP LIMITED (INCORPORATED IN SINGAPORE) REGISTRATION NO. 201007399N
NOTICE OF ANNUAL GENERAL MEETING
(2) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose
of determining the aggregate number of shares that may be issued under
sub-paragraph (1) above, the total number of issued shares (excluding treasury
shares and subsidiary holdings) shall be based on the total number of issued shares
(excluding treasury shares and subsidiary holdings) in the capital of the Company at
the time of the passing of this Resolution, after adjusting for:
(a) new shares arising from the conversion or exercise of any convertible securities;
(b) new shares arising from exercising share options or vesting of share awards;
(c) any subsequent bonus issue, consolidation or subdivision of shares; and
provided such adjustments in sub-paragraphs (2)(a) and (b) above are made in respect
of new shares arising from the conversion or exercise of any convertible securities,
share options or share awards which were issued and are outstanding or subsisting
at the time of passing of this Resolution;
(3) in exercising the authority conferred by this Resolution, the Company shall comply
with the provisions of the Listing Manual of the SGX-ST for the time being in force
(unless such compliance has been waived by the SGX-ST) and the Constitution of
the Company; and
(4) unless revoked or varied by the Company in a general meeting, such authority shall
continue in force until the conclusion of the next Annual General Meeting of the
Company or the date by which the next Annual General Meeting of the Company is
required by law to be held, whichever is earlier
[See Explanatory Note (ii)]
114 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
NORDIC GROUP LIMITED (INCORPORATED IN SINGAPORE) REGISTRATION NO. 201007399N
NOTICE OF ANNUAL GENERAL MEETING
11. Renewal of Share Purchase Mandate
That:
(a) for the purposes of Sections 76C and 76E of the Companies Act, Chapter 50
(the “Companies Act”), the Directors of the Company be and are hereby authorised to
exercise all the powers of the Company to purchase or otherwise acquire ordinary shares
in the capital of the Company (“Shares”) not exceeding in aggregate the Maximum Limit
(as hereinafter defined), at such price(s) as may be determined by the Directors of the
Company from time to time up to the Maximum Price (as hereinafter defined), whether by
way of:
(i) on-market purchases (each a “Market Purchase”) transacted through the SGX-ST’s
trading system, through one or more duly licensed stock brokers appointed by the
Company for that purpose; and/or
(ii) off-market purchases (each an “Off-Market Purchase”) pursuant to an equal access
scheme(s) as may be determined or formulated by the Directors in their discretion,
which scheme(s) shall satisfy all the conditions prescribed by the Companies Act and
otherwise be in accordance with all other laws and other regulations and rules of the
SGX-ST (the “Share Purchase Mandate”);
(b) any Share that is purchased or otherwise acquired by the Company pursuant to the Share
Purchase Mandate shall, at the discretion of the Directors of the Company, either be
cancelled or held in treasury and dealt with in accordance with the Companies Act;
(c) unless varied or revoked by the Company in general meeting, the authority conferred on
the Directors of the Company pursuant to the Share Purchase Mandate may be exercised
by the Directors at any time and from time to time during the period commencing from the
passing of this Resolution and expiring on the earlier of:
(i) the date on which the next Annual General Meeting of the Company is held or is
required by law to be held;
(ii) the date on which the share purchase is carried out to the full extent mandated; or
(iii) the date on which the authority contained in the Share Purchase Mandate is varied
or revoked;
Resolution 10
115NORDIC GROUP LIMITED / ANNUAL REPORT 2019
NORDIC GROUP LIMITED (INCORPORATED IN SINGAPORE) REGISTRATION NO. 201007399N
NOTICE OF ANNUAL GENERAL MEETING
(d) for purposes of this Resolution:
“Maximum Limit” means 10% of the total number of issued Shares of the Company as at
the date of passing of this Resolution (excluding treasury shares and subsidiary holdings
(as defined in the Listing Manual of SGX-ST));
“Maximum Price” in relation to a Share to be purchased, means the purchase price
(excluding brokerage, commission, applicable goods and services tax and other related
expenses) not exceeding:–
(i) in the case of a Market Purchase, 105% of the Average Closing Price of the Shares;
and
(ii) in the case of an Off-Market Purchase pursuant to an equal access scheme, 120%
of the Average Closing Price of the Shares, where:
“Average Closing Price” means the average of the closing market prices of a Share over
the last five Market Days on which the Shares are transacted on the SGX-ST or, as the case
may be, such securities exchange on which the Shares are listed or quoted, immediately
preceding the day of the Market Purchase by the Company or, as the case may be, the
day of the making of the offer pursuant to the Off-Market Purchase, and deemed to be
adjusted, in accordance with the rules of the SGX-ST, for any corporate action that occurs
during the relevant five-day period and the day on which the Market Purchase is made; and
“day of the making of the offer” means the day on which the Company makes an offer
for the purchase or acquisition of Shares from holder of Shares, stating therein the relevant
terms of the equal access scheme for effecting the Off-Market Purchase; and
(e) any of the Directors of the Company be and are hereby authorised to complete and do
all such acts and things (including without limitation, to execute all such documents as
may be required and to approve any amendments, alterations or modifications to any
documents), as they or he may consider desirable, expedient or necessary to give effect
to the transactions contemplated by this Resolution.
[See Explanatory Note (iii)]
12. To transact any other business which may be properly transacted at an Annual General Meeting.
116 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
NORDIC GROUP LIMITED (INCORPORATED IN SINGAPORE) REGISTRATION NO. 201007399N
NOTICE OF ANNUAL GENERAL MEETING
Explanatory Notes:
(i) Ms Ong Hua has informed the Company that she will not be seeking re-election at this Annual General Meeting. Accordingly, she will retire as a
Director of the Company at the conclusion of the Annual General Meeting. Ms Ong Hua will, upon retirement, cease to be the Chairman of the Audit
Committee and as a member of the Nominating Committee and Remuneration Committee.
(ii) The proposed Resolution 9, if passed, will empower the Directors of the Company, from the date of the Annual General Meeting until the date
the next Annual General Meeting is to be held or is required by law to be held, whichever is the earlier, to allot and issue shares and convertible
securities in the Company. The number of shares and convertible securities, which the Directors may allot and issue under this Resolution shall
not exceed 50% of the total number of issued shares (excluding treasury shares and subsidiary holdings) of the Company at the time of passing
this Resolution. For allotment and issue of shares and convertible securities other than on a pro-rata basis to all shareholders of the Company,
the aggregate number of shares and convertible securities to be allotted and issued shall not exceed 20% of the total number of issued shares
(excluding treasury shares and subsidiary holdings) of the Company. This authority will, unless previously revoked or varied at a general meeting,
expire at the next Annual General Meeting.
(iii) The proposed Resolution 10, if passed, will empower the Directors of the Company, from the date of the Annual General Meeting until the date
the next Annual General Meeting is to be held or is required by law to be held, whichever is the earlier, to repurchase (whether by way of Market
Purchases or Off-Market Purchases on an equal access scheme) from time to time of up to 10% of the total number of issued shares excluding
treasury shares and subsidiary holdings at prices up to but not exceeding the Maximum Price.
NOTICE OF RECORD DATE AND DIVIDEND PAYMENT DATE
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed on
5 May 2020 for the purpose of determining members’ entitlements to the final tax exempt (one-tier) (the “Final Dividend”)
to be proposed at the Annual General Meeting of the Company to be held on 27 April 2020.
Duly completed registrable transfers in respect of the shares in the Company received up to the close of business at
5:00 p.m. on 4 May 2020 by the Company’s Share Registrar, Tricor Barbinder Share Registration Services (A division
of Tricor Singapore Pte Ltd), 80 Robinson Road #02-00 Singapore 068898 will be registered to determine members’
entitlements to the proposed Final Dividend. Members whose Securities Accounts with The Central Depository (Pte)
Limited are credited with shares in the Company as at 5:00 p.m. on 4 May 2020 will be entitled to such proposed
Final Dividend.
The proposed Final Dividend, if approved at the Annual General Meeting will be paid on 14 May 2020. .
By Order Of the Board
Chia Meng Ru
Company Secretary
Date: 09 April 2020
117NORDIC GROUP LIMITED / ANNUAL REPORT 2019
NORDIC GROUP LIMITED (INCORPORATED IN SINGAPORE) REGISTRATION NO. 201007399N
NOTICE OF ANNUAL GENERAL MEETING
Notes:
(a) A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member
of the Company.
(b) If a proxy is to be appointed, the form must be deposited at the business office of Share Registrar of the Company, Tricor Barbinder Share Registration
Services (A division of Tricor Singapore Pte Ltd) at 80 Robinson Road #11-02 Singapore 068898 not less than 72 hours before the meeting.
(c) The form of proxy must be signed by the appointor or his attorney duly authorised in writing.
(d) In the case of joint shareholders, all holders must sign the form of proxy.
Personal Data Privacy:
By submitting an instrument appointing a proxy and/or representatives to attend, speak and vote at the AGM and/or any adjournment thereof, a member
of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the
processing and administration by the Company (or its agents) of proxy and representatives appointed for the AGM (including any adjournment thereof)
and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and
in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”),
(ii) warrants that where the member discloses the personal data of the member’s proxy and/or representative(s) to the Company (or its agents), the
member has obtained the prior consent of such proxy and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of
the personal data of such proxy and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of
any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.
118 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
NORDIC GROUP LIMITED (INCORPORATED IN SINGAPORE) REGISTRATION NO. 201007399N
NOTICE OF ANNUAL GENERAL MEETING
NORDIC GROUP LIMITED(Incorporated in the Republic of Singapore)(Company Registration No.: 201007399N)
ANNUAL GENERAL MEETINGPROXY FORM
Important:
1. For investors who have used their CPF/SRS monies to buy shares in the Company, this proxy form is not valid for use and shall be ineffective for all intents and purposes if used or purported to be used by them.
2. CPF/SRS investors are requested to contact their respective Agent Banks for any queries they may have with regard to their appointment as proxy.
I/We, (Name) (NRIC No./Passport No./Company
Registration No.) of (Address)
being a member/members of NORDIC GROUP LIMITED (the “Company”), hereby appoint the Chairman of the
Annual General Meeting (“AGM”), as *my/our proxy to attend and to vote for *me/us on *my/our behalf at the AGM
of the Company to be held at 2 Tuas Ave 10 Singapore 639126 on Monday, 27 April 2020 at 10.00 a.m. and at any
adjournment thereof.
*I/We direct *my/our proxy to vote for or against, or abstain from voting the Ordinary Resolutions to be proposed at
the AGM as indicated hereunder. If no specified directions as to voting is given, the proxy will vote or abstain from
voting at *his/her discretion, as he/she will on any other matter arising at the AGM and at any adjournment thereof.
No. Resolutions relating to: For** Against** Abstain**
ORDINARY BUSINESS
1. To receive and consider the Directors’ Statement and Audited Financial
Statements of the Company for the financial year ended 31 December
2019 together with the Auditor’s Report thereon.
2. To declare a final tax exempt (one-tier) dividend of 0.419 Singapore cent
per ordinary share for the financial year ended 31 December 2019.
3. To re-elect Mr Chang Yeh Hong who is retiring pursuant to Regulation
106 of the Constitution of the Company, as a Director of the Company.
4. To re-elect Mr Lee Kok Keng Andrew who is retiring pursuant to
Regulation 116 of the Constitution of the Company, as a Director of the
Company.
5. To approve the Directors’ fees of S$137,000 for the financial year ending
31 December 2020, payable half-yearly in arrears.
6. To approve additional Directors’ fees of S$3,000 for the financial year
ended 31 December 2019.
7. To approve a one-off Director’s fee of S$15,000 payable to Ms Ong Hua
for the financial year ended 31 December 2019.
8. To re-appoint Messrs RSM Chio Lim LLP as Auditor of the Company and
to authorise the Directors to fix their remuneration.
SPECIAL BUSINESS
9. To authorise the Directors to allot and issue shares.
10. To approve the renewal of Share Purchase Mandate.
Notes:
* Delete accordingly
** Voting will be conducted by poll. If you wish to exercise all your votes “For” or “Against” the relevant resolution,
please tick “X” in the relevant box provided. Alternatively, please indicate the number of votes “For” or “Against”
each resolution. If you mark “X” in the abstain box for a particular resolution, you are directing your proxy not to
vote on that resolution.
Dated this day of 2020
Total No. of Shares in No. of Shares
CDP Register
Register of Members
Signature of Member(s) or Common Seal
IMPORTANT: Please Read Notes for This Proxy Form.
NOTES:
1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in
Section 81SF of the Securities and Futures Act, Chapter 289 of Singapore), you should insert that number of shares. If you have shares registered
in your name in the Register of Members, you should insert that number of shares. If you have shares entered against your name in the Depository
Register and shares registered in your name in the Register of Members, you should insert the aggregate number of shares entered against your
name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a
proxy shall be deemed to relate to all the shares held by you.
2. The instrument appointing a proxy must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument
appointing a proxy is executed by a corporation, it must be executed either under its common seal or under the hand of an officer of the corporation
or attorney duly authorised.
3. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the power of attorney (or other authority) or a duly
certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may
be treated as invalid.
4. Pursuant to the joint statement issued by ACRA, MAS and SGX-ST on 31 March 2020 on safe distancing measures when conducting general
meetings, the Chairman of the AGM shall be the appointed proxy to all members desirous of appointing a proxy for the forthcoming AGM.
5. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its
representative at the AGM, in accordance with Section 179 of the Act.
6. An investor who buys shares using CPF monies (“CPF Investor”) and/or SRS monies (“SRS Investor”) (as may be applicable) may inform their
CPF and/or SRS Approved Nominees to appoint the Chairman of the AGM to act as their proxy.
GENERAL:
The Company shall be entitled to reject the instrument appointing a proxy if it is incomplete, improperly completed or illegible or where the true intentions
of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy. In addition, in the case of a
member whose shares are entered in the Depository Register, the Company may reject any instrument appointing a proxy lodged if the member, being
the appointor, is not shown to have shares entered against his name in the Depository Register as at seventy-two (72) hours before the time appointed
for holding the AGM, as certified by The Central Depository (Pte) Limited to the Company.
PERSONAL DATA PRIVACY:
By submitting a proxy form appointing a proxy and/or representative(s) to attend, speak and vote at the AGM and/or any adjournment thereof, a member
of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the
processing and administration by the Company (or its agents) of proxy and representatives appointed for the AGM (including any adjournment thereof)
and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and
in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”),
(ii) warrants that where the member discloses the personal data of the member’s proxy and/or representative(s) to the Company (or its agents), the
member has obtained the prior consent of such proxy and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of
the personal data of such proxy and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of
any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.
121NORDIC GROUP LIMITED / ANNUAL REPORT 2019
ADDITIONAL INFORMATION ON DIRECTORS SEEKING RE-ELECTION AT THE ANNUAL GENERAL MEETING
Details Name of Director
Chang Yeh Hong Lee Kok Keng Andrew
Date of Appointment 8 April 2010 29 April 2019
Date of last re-appointment (if
applicable)
26 April 2018 NIL
Age 59 67
Country of principal residence Singapore Singapore
The Board’s comments on this
appointment (including rationale,
selection criteria, and the search
and nomination process)
The Board had considered
the Nominat ing Committee’s
recommendation and assessment on
Mr Chang’s background, experience
and commitment in the discharge of
his duties as a Director of Nordic
Group Limited, and is satisfied that
he will continue to contribute to the
Board.
The Board had considered
the Nominat ing Committee’s
recommendation and assessment on
Mr Lee’s background, experience,
independence and commitment in the
discharge of his duties as a Director of
Nordic Group Limited, and is satisfied
that he will continue to contribute to
the Board.
Whether appointment is executive,
and if so, the area of responsibility
Executive appointment. Mr Chang is
responsible for the working of the
Board; the reviewing of business
plans, strategic positioning and
business expansion of the Group.
Non-Executive
Job Title (e.g. Lead ID, AC
Chairman, AC Member etc.)
Executive Chairman and member of
the Nominating Committee
Independent Director, Chairman of
the Remuneration Committee and
member of the Audit Committee and
Nominating Committee
Professional qualifications Bachelor of Arts degree majoring in
Economics from National University
of Singapore
Bachelor of Social Science (Honours
in Economics) from the University of
Singapore
Work ing exper ience and
occupation(s) during the past
10 years
1999 to 2000, Mr Chang was the
regional managing director of Asia
Pacific with Citibank.
2000 to 2002, Mr Chang was the
global head of a product group with
Standard Chartered Bank.
From 2004, Mr Chang took an
executive role with Nordic Group
Limited and he has played a pivotal
role in the growth and development
of our Group.
2005 to 2017, Mr Lee was the senior
executive vice president, head, global
consumer financial services of OCBC
Bank
2010, Mr Lee was the executive
chairman, BCS (Bank Clearing
System) Information System Pte Ltd
2010 to 2017, Mr Lee was the Group
Chief Marketing Officer, Great Eastern
Life Assurance Co Ltd
April 2019, Mr Lee was appointed as
Nordic Group Limited’s independent
director
122 NORDIC GROUP LIMITED / ANNUAL REPORT 2019
ADDITIONAL INFORMATION ON DIRECTORS SEEKING RE-ELECTION AT THE ANNUAL GENERAL MEETING
Shareholding interest in the listed
issuer and its subsidiaries
Yes – 218,017,325 ordinary shares in
Nordic Group Limited
Yes – 467,000 ordinary shares in
Nordic Group Limited and deemed
interest 594,800 ordinary shares in
Nordic Group Limited held through
his spouse
Any relat ionship ( including
immediate family relationships)
with any existing director, existing
executive officer, the issuer and/
or substantial shareholder of the
listed issuer of any of its principal
subsidiaries
Nil Nil
Conflict of interest (including any
competing business)
Nil Nil
Undertaking (in the format set out
in Appendix 7.7 under Rule 720(1)
has been submitted to the listed
issuer
Yes Yes
Other Principal Commitments
Including Directorships
Nil Mr Lee also serves as an Independent
Director at OCBC Al-Amin Bank
Berhad in Malaysia.
Information required under items
(a) to (k) of Appendix 7.4.1 of the
SGX-ST Listing Manual
There is no change to the responses
previously disclosed by Mr Chang
under items (a) to (k) of Appendix
7.4.1 of the SGX-ST Listing Manual
which were all “No”. The Appendix
7.4.1 information in respect of
Mr Chang’s appointment as Director
was announced in 2010.
There is no change to the responses
previously disclosed by Mr Lee
under items (a) to (k) of Appendix
7.4.1 of the SGX-ST Listing Manual
which were all “No”. The Appendix
7.4.1 information in respect of
Mr Lee’s appointment as Director was
announced on 29 April 2019.
This page has been intentionally left blank
This page has been intentionally left blank
ANNUALREPORT
2019
NO
RD
IC G
RO
UP LIM
ITED • A
NN
UA
L REPO
RT 2019
Incorporated in the Republic of Singapore on 8 April 2010)
(Company Registration Number: 201007399N)